"Market Need" Is a Nonsense. Markets Don't Want Anything. But People Do.
What do your customers want?
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Statista informs us that 35% of startups fail for the reason they call "no market need." I trust their numbers, but I can't accept the term "market need."
Markets don't have desires or needs. People have.
Markets can't be satisfied or disappointed. People can.
Companies don't sell their products "in the markets." They sell them to people.
So, "no market need" should be renamed as "people don't like it" or something like that.
"Third is the word" – the epic failure of a marketing campaign
In the 1980s, the owner of the restaurant franchise, A&W, launched a new 1/3 pound burger to compete with McDonald's 1/4 pound burger or 'Quarter Pounder.' A&W launched a 'Third is the Word' campaign to promote their new product. It didn't sell, even though it offered more meat for the same price as McDonald's 1/4 pound burger. Some people insisted that the reason for its failure was Americans' misunderstanding of fractions. They thought that if 4 is greater than 3, it means 1/4 is greater than 1/3.
This article is not about Americans or the math, it's about companies and their relations with customers. A&W could easily avoid this mistake by testing this campaign before launching it. All they needed was several focus groups with typical representatives of the target audience.
Customers - who they are and what they want?
Every company earns money by selling its products (or services) to customers.
Customers buy products only if they feel that the goods offer some value to them.
Consumers believe that a product is of some value if it satisfies their needs.
So, business starts with customer needs and works as long as it can identify and fulfill them. How could we do it better?
Customer needs and psychology
Many psychologists tried to discover what motivates us and makes humans want the things they want. One of them was Steven Reiss. His research found out that all the people on the Earth, regardless of their race, language, religion, beliefs, and place of living, share the same set of sixteen basic needs:
Reiss claimed that we all share the same set of needs, but we prioritize them differently. And that makes every one of us distinct.
Some of his colleagues developed other lists of basic desires. But what all scientists' works have in common is that:
1. The number of basic human desires is limited
2. These basic needs drive all human behavior, including consuming preferences.
So, whatever a customer purchases, either for personal use or for an organization they work for, they fulfill one or several of their basic needs.
How can you use it practically?
I developed a simple tool based on Riess's ideas. I use it for strategic and creative workshops.
Follow the steps:
Create an imaginary person like one of your consumers or the core decision-makers. Refrain from using real persons, your customers, for this exercise. First, it seems unethical. Second, it can lead you astray. Instead, create a fictitious character with much in common with your typical client. If your key customers are too different, develop several characters for each market segment.
Give this character the fictitious name, age, and job title.
Use the Google Docs table at the link. You can download it or copy it to your GD.
The table consists of unfinished sentences describing this person's features. Try to finish as many assertions as possible. It will make your character's portrait vivid and plausible.
Please don't forget about some crucial aspects of this work:
– It is an exercise for teamwork, don't do it alone.
– It is a creative tool. It doesn't aim to create portraits of all your direct customers. Several vivid examples will be enough. You will derive valuable insights into your clients and generate many new ideas. Use them for strategy and product development.
Conclusion
Whomever your customer is, whatever they buy, they look for a way to satisfy some of their basic desires. A deep understanding of these needs will help you improve your strategy and products.
The template will help you identify these needs. I know from experience that these tools are also useful for team building.
If you have any questions about these tools or difficulties with using them, do not hesitate to contact me, and I will help as much as possible.
Additional content
I've started tweeting about 22 strategic questions – one tweet per day. Follow me on Twitter to learn more.
Some tweets from the last week:
In life, creativity means coming up with something that we personally like. In business, it means coming up with something that customers like and are willing to pay for. Unfortunately, startup founders often confuse the two.
Time management is an illusion. We can manage a few things in our lives. And time is not on the list. We need a strategy to prioritize. Some things can be done tomorrow. Others may not be done at all. We must attend to our strategic goals daily, whatever it takes. That's it.
An HR director comes to the CEO and says:
– We need to train and teach our employees.
The CEO thought for a moment and said:
– What if they learn and leave?
– And what if they don't learn and stay?
Video of the week
Video on 16 customer needs and business strategy. Watch it here.