The Needs Discovery Process: Tapping into the Problems of Your Customer

June 27, 2017

The Needs Discovery Process one of the most important steps involved in making connections. It’s more than sporadic, untargeted questioning to uncover pain-points. If done effectively, it is the very first step in building a deeper relationship with your customers that benefits you both. One of the most effective ways to guide the process of Needs Discovery is through a series of open-ended questions. We can then use the customer’s answers to these questions to build something called a Needs Statement.

Building a Needs Statement

A Needs Statement is simple. It simply involves breaking a problem down into smaller, more manageable segments. You don’t even need to worry about suggesting solutions just yet – that is the next step. Your Needs Statement should consist of three distinct parts.

  1. Define. What are you trying to solve? For example, “I need a way to…”
  2. Population. Who does the problem involve? Who has the problem, and who is it affecting?
  3. Outcome. What will happen after the problem is solved?

A Needs Statement in Action

I was working with a large media company a couple of years ago.

Even in 2016, this company was still earning 90% of its revenue from newspapers and print advertising. They understood the importance of an online presence, and tried over many years to migrate more of their content online. However, they were unable to successfully monetize it. In the meantime, large competitor corporations like Google and Facebook were growing bigger and bigger. We stepped in to collaborate with this company, with the vision of creating and prioritizing their own Needs Statements. This is what we came up with:

We need a way to deliver a digital user experience for our new media properties that offers personalized content, enhances engagement and drives subscription revenue.

  • Problem – We need a way to deliver a digital user experience.
  • Population – New media properties.
  • Outcome – We want to offer personalized content, enhance engagement, and drive subscription revenue.

By going through the needs discovery process and helping to build the Needs Statement with our customer, we were able to identify some interesting information about the average time a person spends reading the morning paper. It turned out that those reading a printed paper will usually spend an average of 30 minutes reading it, whereas those reading a paper online will spend an average of only 15 minutes reading it. We also uncovered that when this company did testing way back, they found out that increasing the time that a user spent reading online would dramatically decrease the churn for the online service, thus leading to increased revenue. We then explored together with the company, leveraging new technology to offer a brand new subscription service that would offer on-demand, personalized content to a user’s mobile device in an effective way.

Am I an expert in the media market? Absolutely not. But I didn’t need to be. By using the Needs Discovery framework, I was able to steer the conversation in the right direction that allowed me to identify those important pain points and see if I could find suitable solutions.

The Importance of Understanding the Problem Before Proposing a Solution

Never suggest or presume a solution without knowing all the details. The key to being successful is to work with your customer to understand their problem in-depth. Jumping to the wrong conclusion can be detrimental.

For example, “We need a way to move boxes that reduces our warehouse workers’ injuries by at least 80%” is a good initial solution.

“We need a forklift” is a bad initial solution.

Things to Consider When Creating a Needs Statement

When creating a new Needs Statement, there are a number of important points you should be assessing to make sure you’re chasing the right opportunity:

1. Capitalize on a megatrend by understanding the context. People will invest in things that they perceive will be large and growing markets, so it’s important you take some time to understand the context. An ageing population in Japan, education in Brazil, urbanization in China, and digital transformation in the retail sector are all examples of things that may be important depending on your industry.

2. An interesting problem vs. an important problem. How strong is the need? How big is the market? Is it a necessity, or is it just nice to have? People will pay more for a pain-killer than they will for a vitamin.

3. Make it easy for the customer. For example, Uber greatly simplified the process of getting a taxi. Previously, to get a ride you called a taxi company, waited to reach a dispatcher, waited for a car to be dispatched, hoped the driver would find you, and hoped you had enough cash when you reached your destination. With Uber, you open your smartphone and summon the nearest car with one tap. You already know how far away the car is because you can see it in real-time on a map. The driver also sees your location, so it’s easy for them to come right to you.

4. Who benefits? Which business units will benefit from your solution?

5. Impact: How strongly will the solution benefit the businesses you are targeting?

6. Alternatives: Who are the competitors for the product or service of the business? How does the target offering compare with similar products? Why should a customer choose to deal with your business? What do you offer that others don’t?

Applying These Points to a Real-Life Problem

Let’s go back to our earlier media company solution to see how we can apply the above points to a real-life problem. They were focused on an important project. A large part of their revenue depended on this, and failure could result in their company being completely overtaken by their competition. They tapped into an important megatrend. The media market is large, and digital transformation is becoming increasingly important. It is also fiercely competitive. The company needed the ability to differentiate themselves from the Internet Goliaths. They had 100 +years of content behind them. This was a huge asset. But what they needed was a mechanism to push relevant content on-demand to mobile devices to make it easier for their customers to access it.

Collaborative Selling is Not a One-Way Street

The first step is to inspire the customer to engage and connect with you. Once this connection has been established, it is important to focus on collaborating with the customer. To do this, you might suggest that the customer gets back to you with a few Needs Statements that you can review, assess and prioritize together. Always keep the end in sight, and remember the importance of moving forward on a step-by-step basis. Each engagement has a purpose.

  • Meeting 1: Inspire
  • Meeting 2: Need Discovery
  • Meeting 3: Assessment & Prioritization of Needs Statements
  • Meeting 4: Building the Value Proposition and Mapping Your Capabilities to Your Customer’s Needs
  • Meeting 5: Delivery of Proposal

As you progress through these meetings, you are working to gradually build trust and reduce the risk between yourself and your customer.

Built for Global

To learn more about how to succeed when bringing innovation to market, you can check out my book, Built for Global, where I share what I’ve learned from decades of selling advanced technology to large companies all around the world.

About me:

Robert Pearlstein has 25 years experience working with Silicon Valley companies to sell advanced technology to global companies. He currently works as Vice President for Global Business Development as part of SRI (Stanford Research Institute) one of the largest independent research and development organizations in the United States.