One particular hurdle that many new sales professionals face is converting leads into actual sales. This was the exact predicament faced by Vaibhav, a recent graduate who joined a renowned company. The moment he hit the floor after onboarding, he knew he was hitting the wrong chords when his calls were not converting as he expected.
He contacted his uncle, Sivaranjan, vice president at a major corporation and asked for his help to understand the nuances of sales. Siva agreed to mentor him and they both started their journey to explore the uncharted waters of the sales world. By far, they have unraveled the buying and selling process dynamics, the myths and facts about sales, and the FAB model.
Do you know Steve Jobs, Vaibhav, asked Siva curiously? Jobs says, “Customers can’t tell what they want.” Many other entrepreneurs argue that “Customers only know what they want when they see it.” You know what, Vaibhav, in a sense they are right.
Uncle, both the phrases seem quite contradictory, how come they both are right? – Vaibhav asked.
Customers are exceptionally terrible at proposing new and inventive solutions that do not already exist in the market. So why bother communicating with your customers? The answer is simple: to better understand them and the functions they enlist your products or services to perform for them. Customers are free to tell us about their requirements or the benefits they desire from a product, service, or experience, explained Siva.
Consider the customer needs to be a source of customer value. A need exists when an end user seeks a benefit that a product or service could provide in a given setting, he continued.
As Seth Godin said, “Don’t find customers for your products, find products for your customers.”
Vaibhav, if you approach your customers with a question that interests them and fine-tunes with their needs. It will work as a holy grail to closing more deals with exemplary customer satisfaction, said Siva.
It means you have to tap into the customer’s needs to understand what kind of product they are looking for, he added.
In Neil Rackham’s powerful book on sales, “SPIN Selling,” he addresses it by introducing a systematic approach to sales that focuses on uncovering and fulfilling customer needs. Today, we will explore the concept of customer needs, its significance in sales, and how the principles outlined in “SPIN Selling” can empower you as a sales professional to excel in your endeavors.
What Are Customer Needs?
“Customers don’t measure you on how hard you tried. They measure you on what you deliver.”
– Steve Jobs
A customer need is a state of perceived deprivation, implying a lack of or wish for a desired outcome or experience. There are various client needs, ranging from physical necessities such as food, shelter, and safety. Affection, attention, self-expression, knowledge, and appreciation are all strong motivators of human behavior. The market is not the source of needs, but rather a social solution to meet as many of them as feasible.
Customer needs are the characteristics that businesses must address in order to entice existing or new customers to make a purchase. Price and functionality of products and services are two customer needs that can motivate purchases. To understand client demands, brands can perform market research or collect customer input. When a company solves a customer’s problem, it is more probable that it will be able to cater to the customer, meet their wants, and develop customer loyalty, allowing the business to thrive.
Vaibhav, in these two instances, you are the bridge to eliminate the gap and bring together a business that takes care of its customers’ needs and demands with the utmost customer satisfaction, said Siva.
This makes me understand the importance of my role in the organization, uttered Vaibhav.
Once you understand the comprehensive set of needs, it can be the best source of competitive advantage. You should know what to focus on to ensure the products, services, and experiences are created to delight the customer to enhance brand loyalty, added Siva.
What Is The Importance Of Customer Needs?
Vaibhav, you have to understand that customer needs are fundamental from both the brand’s and the customer’s perspectives. Customer focus groups and surveys can assist firms in identifying new items that will meet the needs of future customers. Understanding consumer demands allows firms to personalize services to unique preferences, which can lead to increased sales and better targeting of a target demographic.
Tailored Solutions
By understanding customer needs, sales professionals can customize their offerings to align with what customers truly require. This increases the chances of providing solutions that precisely meet customer expectations, leading to higher customer satisfaction and repeat business.
Competitive Advantage
By actively listening to customers and aligning their products or services accordingly, sales professionals can gain a competitive edge over their rivals. Addressing unique customer needs helps build trust, enhances brand reputation, and positions the sales professional as a valuable partner rather than just a transactional seller.
Long-term Relationships
By consistently meeting customer needs, sales professionals can foster long-term relationships. Satisfied customers are more likely to become brand advocates, referring others and contributing to the growth and success of the sales professional and their organization.
Vaibhav, the most important factor for any business to thrive is the ability to address customer needs. Studies reveal that organizations that are truly customer-centric can become up to 60% more profitable. So, everything boils down to your understanding of what your customer wants and how you are tailoring nearly every aspect of your business towards them, said Siva.
Seems like I have a huge responsibility on my shoulders, Vaibhav said agreeing with his uncle.
Yes, you do, Vaibhav.
Now, shall we proceed to understand the two most crucial needs of customers? – asked Siva.
Yes, uncle, said Vaibhav.
Types Of Customer Needs
Vaibhav, the Titanic, the largest ship of its time, was believed to be unsinkable due to its advanced design. However, on April 14, 1912, it collided with an iceberg and sank in just a few hours, contrary to what was expected of it. This incident serves as a reminder that customer needs are like an iceberg, and can have both visible stated aspects and hidden latent aspects that are critical to address in business. In order to keep the ship afloat, we have to take care of both the stated and latent needs of a customer, said Siva.
Latent Needs: Uncovering the Unspoken Desires
“The biggest mistake salespeople make is assuming customers know what they need.”
– Neil Rackham
Several studies support the importance of uncovering latent needs in the sales process. A study by the Corporate Executive Board (CEB) found that customers with latent needs are three times more likely to make a purchase compared to those with only stated needs. This research highlights the significance of identifying and addressing latent needs as a means to drive sales success.
Another study published in the Journal of Marketing Research revealed that sales professionals who effectively uncover latent needs experience higher levels of customer satisfaction and loyalty. By going beyond the surface and understanding customers’ unspoken desires, sales professionals can deliver solutions that truly resonate with their customers, fostering long-term relationships and repeat business.
Rackam delves into the concept of latent needs – the unspoken desires that lie beneath customers’ stated needs. While customers may articulate their requirements during the sales process, these stated needs often only scratch the surface of what they truly seek.
For example, a customer walks into a smartphone store and expresses a need for a phone with a long battery life. When you dig deeper for his specific requirement, you discover that the customer is a frequent traveler and requires a phone with strong connectivity options and durable construction to withstand constant use. The latent need, in this case, is not just a long battery life but also a phone suitable for frequent travel.
Rackham emphasizes that sales professionals must go beyond the surface and uncover latent needs to provide comprehensive and tailored solutions. Latent needs are the deeper motivations, aspirations, and challenges that customers may not explicitly express. By identifying and addressing these latent needs, sales professionals can differentiate themselves from competitors and deliver greater value to their customers.
Vaibhav, the key to uncovering latent needs lies in effective questioning and active listening. By asking insightful questions and engaging in dialogue, you can encourage customers to delve deeper into their needs and motivations. This approach enables you to gain a more holistic understanding of customers’ underlying desires and aspirations, explained Siva.
Uncle, it means I have to listen with the intent to understand, not just to respond, Vaibhav said while trying to make sense of the latent needs.
Exactly, Vaibhav, you got it absolutely right, Siva said with fervor in his voice.
Stated Needs: Addressing the Surface Requirements
“Success in sales is about meeting the needs of your customers. If you can’t address their stated needs, someone else will.”
– Jill Konrath
According to a study by McKinsey & Company, companies that effectively meet customers’ stated needs outperform their competitors in terms of sales growth and gross margin. This research emphasizes the importance of understanding and addressing customers’ initial requirements.
While latent needs represent the deeper desires of customers, stated needs are the explicit requirements and preferences they express during the sales process. Stated needs are often the initial requests or problems that customers communicate to sales professionals.
Addressing stated needs is a critical step in the sales process as it demonstrates attentiveness to customers’ immediate concerns. By acknowledging and addressing these surface-level requirements, sales professionals can build rapport and trust with customers.
For example, a customer contacts a car dealership and states that they are looking for a fuel-efficient vehicle with advanced safety features. You acknowledge these stated needs and proceed to provide information about the available models that align with the customer’s requirements, explained Siva.
However, Vaibhav, it is important to recognize that solely focusing on stated needs can limit your ability to provide optimal solutions. By neglecting to uncover latent needs, you may risk offering generic solutions that may not fully satisfy customers’ underlying desires, warned Siva.
You have to understand and address customer needs as it is paramount in sales, and the concepts of latent needs and stated needs play crucial roles in this process. You have to engage in active listening, effective questioning, and understand the motivations and aspirations that customers may not explicitly express, said Siva.
By going beyond the stated needs and delving into the realm of latent needs, you can provide tailored solutions, and foster long-term customer relationships. Research and studies affirm the significance of uncovering latent needs, indicating that it leads to higher customer satisfaction, loyalty, and sales growth, added Siva.
Uncle, I have understood the distinction between latent and stated needs as it is quintessential for me to effectively address customer expectations. By identifying and fulfilling both the needs, I can enhance customer satisfaction, build trust, and increase my chances of closing successful deals, said Vaibhav enthusiastically.
Yes, Vaibhav, once you grasp the entire sales concepts, you will be able to provide comprehensive and tailored solutions to your customers, said Siva with a smile.
https://www.studysmarter.co.uk/explanations/marketing/introduction-to-marketing/customer-needs/
https://www.masterclass.com/articles/customer-needs
https://www.tadigital.com/insights/perspectives/how-identify-latent-customer-needs
https://www.csat.ai/wp-content/uploads/2019/10/Celebrating-Customer-Service-Successes.jpg
https://www.tidio.com/wp-content/uploads/customer-needs.png
Written By: Jimmy Jain
Edited By: Afreen Fatima
Society of Design Thinking Professionals
