A Look into Customer Needs and How To Identify Them

Updated July 21, 2022

Regardless of an organization's size, your ability to retain customers and bring in more customers plays a key role in a company's success. Many industries experience competition and the innovation of new products so it's imperative to understand what motivates your customers, what their challenges are, what they desire and what their business goals are. It's only after understanding their needs that you can tailor your products, marketing and sales strategies to their satisfaction for you to maintain your existing client list and attract more customers. In this article, we highlight what customer needs are and different factors that shape them.

What are customer needs?

Customer needs are psychological and physical influences that make customers purchase an item or go for a specific service. However, most customers hardly know their psychological needs when going for an item or service since their desires, beliefs, preferences and opinions significantly shape the need. As a business owner, it's vital to differentiate these two customer needs and use them to your advantage.

Here's a breakdown of the two primary types of customer needs.

Physical needs

When dealing with a customer, it's easy to identify their physical needs. These needs are measurable, direct and have a definite cause‌. For example, if the customer's hands are cold, they require some gloves. A similar case applies to motorists with a broken windshield; fixing it is an essential need. Physical needs are directly related to why a customer needs the service or product.

Psychological needs

Because of competition in both services and products, customers have to choose the best. The forces that influence their decision-making are psychological needs. At this stage, business owners have to meet the psychological needs if they want to close a deal. They must engage the customer directly and take time using their educated guesses or studying customer behavior to meet their psychological needs.

Related: Guide To Customer Service

Why is it essential to meet customer needs?

Great marketers and successful businesses know that ‌customers are the principal driving force behind a brand or service. If a part of their needs is not satisfied, you create a psychological and physical gap between what they have and what they desire. Therefore, it's essential to meet all their needs to prevent loopholes that can offer your competitors a chance to take advantage of the need created by the gap.

As a determined business person, develop a database to help you understand and discover different customer needs. Once you integrate their needs into your existing services or brand, you'll be able to retain the existing client base and attract more potential customers. It's imperative to revamp the marketing approach or start changing the product if that's what your customer wants. Failure to make these changes will amount to the loss of important clients, affecting your return on investment.

You should analyze customer needs from time to time if you want to stay on top of your competitors. Research marketing performance, sales and product development, and understand the developing customer needs. By understanding your customers' behaviors and needs, you'll be one step ahead of your business rivals.

Related: 8 Types of Customer Service

Types of customer needs

Customer needs vary and keep changing with time. Before introducing a new product or service in the market, you must first find out if it matches the client's needs and boosts a customer's purchasing decision. Below are types of customer needs ‌each entrepreneur must identify to stay relevant in the industry:

Product functionality

Customers want products that can solve their problems. Whatever you're selling, including services, should be highly functional to be accepted and relied upon by consumers. Make regular improvement or function boost a priority.


Each customer has a unique budget when looking for a service or product. Before customers seal a deal, they first check whether your competitors have a better price. Instead of lowering your prices to beat the competition, consider offering discounts. Discount offers effectively win more customers, especially in areas where several competitors deal with the same products or services. For instance, you can give discounts to customers buying products in bundles or purchases worth a set amount.


Customers consider the product's quality before making any purchase. Many customers will choose high-quality items regardless of the product cost. This also applies to services; clients may pay more for top-quality service. For example, a customer can opt for a $20 handbag that may last for eight months instead of a $200 handbag that could last for years. The product quality must align with its price.

Product choice

Offering a choice about products or services is an important aspect of serving customer needs. To avoid losing customers and potential sales, provide a range of services or products. For example, customers can choose from different brands, sizes, styles and prices.


Customers prefer convenience over cost. With tight schedules at work and less time for shopping over the weekend, they want a quick, straightforward and hassle-free shopping experience. For example, most people prefer online shopping instead of physical shopping or takeout food. They would rather pay the extra delivery fee in the comfort of their offices or homes than drive several miles for the products.

Product sustainability and reliability

Customers want assurance that the products they're buying are long-lasting and can remain functional for a reasonable time. Sell products that are sustainable and environmentally friendly to maintain your customers. You'll get repeat customers and more referrals once they discover ‌your products are reliable.

Product information

Whether you're marketing software, e-books, foods or clothes, customers want to know more about them. They want detailed information like nutritional value, the material used and the maintenance process. This information is crucial to their purchasing decision. The ability to give concise answers on products or services connects well with clients who prefer friendly customer service.

Simplicity of use

Your products must be easier to use when compared with others. Customers want something they can work with without having to read the manual on every step. Make the products as simple as possible to avoid creating more work for the customers.

Enhanced performance

To meet their timelines and achieve their goals, customers need products that perform well. Invest in services and products that offer efficient performance regardless of their use.

Product compatibility

Are your products compatible with others, or will customers need to have everything customized to become compatible? Make products that can align with others to satisfy customer needs. They want products ‌they can directly use with what they already have.

Empathy and fairness

Customer service plays a major role in shaping organizational growth. Your customer care services should be exceptional for customers to feel understood and cared for. Also, ensure that the pricing, contract duration and terms of service are fair to clients.


Relaying the correct information on both products and services during marketing is vital in enhancing transparency. When the marketing information differs from the actual thing, customers feel cheated and might boycott your products or prefer your competitors.

Related: Everything You Need To Know About Customer Satisfaction

How to identify customer needs

How do you identify your customer needs? Several methods prove effective in the identification and analysis of customer needs. They include:

1. Initiate an analysis survey

Surveys are common in companies that want to evaluate their customer relationships and areas that require improvements. A customer need survey is essential for meeting the needs of target customers. In your survey, include questions that address general product attitude and awareness. Below are questions to include in the survey:

  • Positive and negative questions that are associated with your products

  • Questions that ask your customers to give a comparison of products that are like your brand

  • Questions that ask a client's reasons ‌for preferring your products to those of your competitors

2. Use social media

Social media is a powerful marketing tool among all age groups. Most businesses rely on this platform for marketing and online sales. Carrying out a product survey over this platform will bring out fast responses from participants. Data collected from the social listening tools will help improve and expand your brand according to the customer needs.

Using hashtags makes it simple for you to monitor the conversation because you'll learn what people say about the services whenever the tagged keyword is used. The responses offered in these conversations will identify areas that your brand does well and those that require more input.

3. Use means-end analysis

After conducting a survey showing your customer needs, it's time to work out the data and identify reasons that make potential customers buy from you. The survey also outlines why your products are preferable when compared to others.

A means-end analysis gives answers on the features, benefits and values that attract customers to your services or products. Although most customers have different reasons why ‌they like a product, it's important to collect this information. Group it according to their responses and find the motivating factors.

Related: How To Understand Customer Needs in 4 Steps

Tips for meeting customer needs

To understand your customer needs, you should consider their viewpoint. Try to figure out what they think of the products and what could drive them away from making a purchase. The following tips are critical for meeting customer needs.

Give instructions for ease of use

The need to use an item ‌makes a customer purchase it. If the setup process is not clear, they may not reap the value of the product. Therefore, provide potential customers with product instructions when selling to help them quickly understand how the products are used. Besides, the product manual will help them steer away from installation challenges and make it possible for them to troubleshoot without the need to hire a repair or installation expert.

Offer consistent communication

Customers feel confused when businesspeople give conflicting messages. To prevent this confusion, introducing a consistent communication channel within an organization will ensure that everyone gets concise and timely messages. When everyone in the business understands product specifications, functions, usability and pricing, customers will get coherent messages when in need of a product.

Embrace customer relationships

The need to immediately use an item is among the reasons ‌customers go for a product. Thinking about their needs in the future is a strategic way of meeting their needs. Reach out to them some weeks or months after the purchase and find out how they are using the products. This customer service encourages clients to buy again and market your products or services through word-of-mouth.


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