Identifying Customer
Needs
EXHIBIT 5-1
Photo by Stuart Cohen
Existing products used to drive screws: manual screwdrivers, cordless screwd ri ver, screw gun, cordless drill with driver bit.
A successful hand tool manufacturer was exploring the growing market for handheld power tools. After performing initial research, the firm decided to enter the market with a cordless screwdriver. Exhibit 5-l shows several existing products used to drive screws. After some initial concept work, the manufacturer's development team fabricated and field-tested several prototypes. The results were discouraging. Although some of the products were liked better than others, each one had some feature that customers objected to in one way or another. The results were quite mystifying since the company had been successful in related consumer products for years. After much discussion, the team de cided that its process for identifying customer needs was inadequate.
This chapter presents a method for comprehensively identifying a set of customer needs. The goals of the method are to:
• Ensure that the product is focused on customer needs.
• Identify latent or hidden needs as well as explicit needs.
• Provide a fact base for justifying the product specifications.
• Create an archival record of the needs activity of the development process.
• Ensure that no critical customer need is missed or forgotten.
Develop a common understanding of customer needs among members of the develop
ment team.
The philosophy behind the method is to create a high-quality information channel that runs directly between customers in the target market and the developers of the product. This philosophy is built on the premise that those who directly control the details of the product, including the engineers and industrial designers, must interact with customers and experience the use environment of the product. Without this direct experience, techni cal trade-offs are not likely to be made correctly, innovative solutions to customer needs may never be discovered, and the development team may never develop a deep commit ment to meeting customer needs.
The process of identifying customer needs is an integral part of the larger product de velopment process and is most closely related to concept generation, concept selection, competitive benchmarking, and the establishment of product specifications. The customer needs activity is shown in Exhibit 5-2 in relation to these other front-end product develop ment activities, which collectively can be thought of as the concept development phase.
The concept development process illustrated in Exhibit 5-2 implies a distinction be
tween customer needs and product specifications. This distinction is subtle but important.
EXHIBIT 5-2 The customer-needs activity in relation to other concept development activities.
Needs are largely independent of any particular product we might develop; they are not specific to the concept we eventually choose to pursue. A team should be able to identify customer needs without knowing if or how it will eventually address those needs. On the other hand, specifications do depend on the concept we select. The specifications for the product we finally choose to develop will depend on what is technically and economically feasible and on what our competitors offer in the marketplace, as well as on customer needs. (See Chapter 6, Product Specifications, for a more detailed discussion of thi s distinction.) Also note that we choose to use the word need to label a ny attribute of a po tential product that is desired by the customer; we do not distinguish here between a want and a need. Other terms used in industrial practice to refer to customer needs include cus tomer attributes a nd customer requirements.
Identifying customer needs is itself a process, for which we present a five-step method. We believe that a little structure goes a long way in facilitating effective product develop ment practices, and we hope and expect that this method will be viewed by those who employ it not as a rigid process but rather as a starting point for continuous improvement and refinement. The five steps are:
1. Gather raw data from customers.
2. Interpret the raw data in terms of customer needs.
3. Orga nize the needs into a hierarchy of primary, secondary, and (if necessa ry) tertiary needs.
4. Establish the re lative importance of the needs.
5. Reflect on the results and the process.
We treat each of the five steps in turn and illustrate the key points with the cordless screwdriver example. We chose the screwdriver because it is simple enough that the method is not hidden by the compl exity of the example. However, note that the same method, with minor adaptation, has been successfully applied to hundreds of products ranging from kitchen utensils costing less than $10 to machine tools costing hundreds of thousands of doll ars.
Before beginning the development project, the firm typicall y specifies a particular market opportunity and lays out the broad constraints and objectives for the project. This information is frequently formalized as a mission statement (a lso sometimes called a charter or a design brief). The mission statement specifies which direction to go in but generally does not specify a precise destination or a particular way to proceed. The mi s sion statement is the result of the product planning activities described in Chapter 4, Prod uct Pla nning. The mission statement for the cordl ess screwdriver is shown in Ex hibit 5-3.
The cordless screwdriver category of products is already relatively well developed. Such products are particularly well suited to a structured process for gathering customer needs. One could reasonably ask whether a structured method is effective for completely new categories of products with which customers have no experience. Satisfying needs is just as important in revolutionary products as in incremental products. A necessa ry condi tion for product success is that a product offer perceived benefits to the customer. Products offer benefits when they satisfy needs. This is true whether the product is an incremen tal variation on an existing product or whether it is a completely new product based on a revolutionary invention. Developing an entirely new category of product is a risky undertaking, and to some extent the only real indication of whether customer needs have
EXHIBIT 5-3
Mission statement for the cordless screwdriver.
been identified correctly is whether customers like the team's first prototypes. Nevertheless, in our opinion, a structured method for gathering data from customers remains useful and can lower the inherent risk in developing a radically new product. Whether or not custom ers are able to fully articulate their latent needs, interaction with customers in the target market will help the development team build a personal understanding of the user's envi ronment and point of view. This information is always useful, even if it does not result in the identification of every need the new product will address.
Step 1: Gather Raw Data from Customers
Consistent with our basic philosophy of creating a high-quality information channel di rectly from the customer, gathering data involves contact with customers and experience with the use environment of the product. Three methods are commonly used:
1. Interviews: One or more development team members discusses needs with a single customer. Interviews are usually conducted in the customer's environment and typically last one to two hours.
2. Focus groups: A moderator facilitates a two-hour discussion with a group of 8 to
12 customers. Focus groups are typically conducted in a special room equipped with a two-way mirror allowing several members of the development team to observe the group. In most cases, the moderator is a professional market researcher, but a member of the development team sometimes moderates. The proceediqgs are usually video recorded. Par ticipants are usually paid a modest fee ($50 to $100 each) for their attendance. The total cost of a focus group, including rental of the room, participant fees, video recording, and refreshments, is about $5,000. In most U.S. cities, firms that recruit participants, moder ate focus groups, and/or rent facilities are listed in directories under "Market Research."
Identifying CustomerNeedsEXHIBIT 5-1 Photo by Stuart Cohen Existing products used to drive screws: manual screwdrivers, cordless screwd ri ver, screw gun, cordless drill with driver bit.A successful hand tool manufacturer was exploring the growing market for handheld power tools. After performing initial research, the firm decided to enter the market with a cordless screwdriver. Exhibit 5-l shows several existing products used to drive screws. After some initial concept work, the manufacturer's development team fabricated and field-tested several prototypes. The results were discouraging. Although some of the products were liked better than others, each one had some feature that customers objected to in one way or another. The results were quite mystifying since the company had been successful in related consumer products for years. After much discussion, the team de cided that its process for identifying customer needs was inadequate.This chapter presents a method for comprehensively identifying a set of customer needs. The goals of the method are to:• Ensure that the product is focused on customer needs.• Identify latent or hidden needs as well as explicit needs.• Provide a fact base for justifying the product specifications.• Create an archival record of the needs activity of the development process.• Ensure that no critical customer need is missed or forgotten.Develop a common understanding of customer needs among members of the development team.The philosophy behind the method is to create a high-quality information channel that runs directly between customers in the target market and the developers of the product. This philosophy is built on the premise that those who directly control the details of the product, including the engineers and industrial designers, must interact with customers and experience the use environment of the product. Without this direct experience, techni cal trade-offs are not likely to be made correctly, innovative solutions to customer needs may never be discovered, and the development team may never develop a deep commit ment to meeting customer needs.The process of identifying customer needs is an integral part of the larger product de velopment process and is most closely related to concept generation, concept selection, competitive benchmarking, and the establishment of product specifications. The customer needs activity is shown in Exhibit 5-2 in relation to these other front-end product develop ment activities, which collectively can be thought of as the concept development phase.The concept development process illustrated in Exhibit 5-2 implies a distinction between customer needs and product specifications. This distinction is subtle but important.EXHIBIT 5-2 The customer-needs activity in relation to other concept development activities. Needs are largely independent of any particular product we might develop; they are not specific to the concept we eventually choose to pursue. A team should be able to identify customer needs without knowing if or how it will eventually address those needs. On the other hand, specifications do depend on the concept we select. The specifications for the product we finally choose to develop will depend on what is technically and economically feasible and on what our competitors offer in the marketplace, as well as on customer needs. (See Chapter 6, Product Specifications, for a more detailed discussion of thi s distinction.) Also note that we choose to use the word need to label a ny attribute of a po tential product that is desired by the customer; we do not distinguish here between a want and a need. Other terms used in industrial practice to refer to customer needs include cus tomer attributes a nd customer requirements.Identifying customer needs is itself a process, for which we present a five-step method. We believe that a little structure goes a long way in facilitating effective product develop ment practices, and we hope and expect that this method will be viewed by those who employ it not as a rigid process but rather as a starting point for continuous improvement and refinement. The five steps are:
1. Gather raw data from customers.
2. Interpret the raw data in terms of customer needs.
3. Orga nize the needs into a hierarchy of primary, secondary, and (if necessa ry) tertiary needs.
4. Establish the re lative importance of the needs.
5. Reflect on the results and the process.
We treat each of the five steps in turn and illustrate the key points with the cordless screwdriver example. We chose the screwdriver because it is simple enough that the method is not hidden by the compl exity of the example. However, note that the same method, with minor adaptation, has been successfully applied to hundreds of products ranging from kitchen utensils costing less than $10 to machine tools costing hundreds of thousands of doll ars.
Before beginning the development project, the firm typicall y specifies a particular market opportunity and lays out the broad constraints and objectives for the project. This information is frequently formalized as a mission statement (a lso sometimes called a charter or a design brief). The mission statement specifies which direction to go in but generally does not specify a precise destination or a particular way to proceed. The mi s sion statement is the result of the product planning activities described in Chapter 4, Prod uct Pla nning. The mission statement for the cordl ess screwdriver is shown in Ex hibit 5-3.
The cordless screwdriver category of products is already relatively well developed. Such products are particularly well suited to a structured process for gathering customer needs. One could reasonably ask whether a structured method is effective for completely new categories of products with which customers have no experience. Satisfying needs is just as important in revolutionary products as in incremental products. A necessa ry condi tion for product success is that a product offer perceived benefits to the customer. Products offer benefits when they satisfy needs. This is true whether the product is an incremen tal variation on an existing product or whether it is a completely new product based on a revolutionary invention. Developing an entirely new category of product is a risky undertaking, and to some extent the only real indication of whether customer needs have
EXHIBIT 5-3
Mission statement for the cordless screwdriver.
been identified correctly is whether customers like the team's first prototypes. Nevertheless, in our opinion, a structured method for gathering data from customers remains useful and can lower the inherent risk in developing a radically new product. Whether or not custom ers are able to fully articulate their latent needs, interaction with customers in the target market will help the development team build a personal understanding of the user's envi ronment and point of view. This information is always useful, even if it does not result in the identification of every need the new product will address.
Step 1: Gather Raw Data from Customers
Consistent with our basic philosophy of creating a high-quality information channel di rectly from the customer, gathering data involves contact with customers and experience with the use environment of the product. Three methods are commonly used:
1. Interviews: One or more development team members discusses needs with a single customer. Interviews are usually conducted in the customer's environment and typically last one to two hours.
2. Focus groups: A moderator facilitates a two-hour discussion with a group of 8 to
12 customers. Focus groups are typically conducted in a special room equipped with a two-way mirror allowing several members of the development team to observe the group. In most cases, the moderator is a professional market researcher, but a member of the development team sometimes moderates. The proceediqgs are usually video recorded. Par ticipants are usually paid a modest fee ($50 to $100 each) for their attendance. The total cost of a focus group, including rental of the room, participant fees, video recording, and refreshments, is about $5,000. In most U.S. cities, firms that recruit participants, moder ate focus groups, and/or rent facilities are listed in directories under "Market Research."
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