How to Identify Untapped Customer Insights and Needs to Drive Innovation

Customer Insights

Compelling customer insights have always been the inspiration for great marketing, innovation and business activity. Nathan Baird says that now more than ever, these insights are required to adapt and innovate for changing market conditions and customer needs.

Yet, many organisations still waste their time developing solutions for non-existent needs.

In a study cited by Robert G. Copper in his book Winning at New Products he reveals that the number one factor behind innovation failure was “a lack of thoroughness in identifying real needs in the marketplace”, with teams often “making assumptions in order to justify the project”.

To increase your chances of success you need to start with the problem, not the solution, by uncovering true customer insights and needs.

Start with empathy

Brainstorming customer needs, even if you’re using a customer empathy map, does not equal empathy and understanding. In Silicon Valley entrepreneur, Steve Blank’s book The Startup Owner’s Manual he says ‘real-life insights don’t live in your office; they exist out in the world of your customers and potential customers. You have to get out of the building.’

Empathy is the ability to understand and share the feelings of another. This is best done by immersing yourselves in the world of the customer to identify who they are, what is important to them and what pains and delights them. Three useful methods for doing this are 1) multiple sources, 2) extreme customers and 3) deprivation and disruption.

Multiple sources of research help you build good empathy for your customers by ‘being the customer’ where you experience the situation the customer experiences, ‘being with the customer’ where you observe the customer in situ and interview them after and ‘learning about the customer’ by talking to the people around them including subject matter experts.

Another great method is to talk to extreme customers. By observing and talking to extreme customers you find the experience is heightened for them, so you uncover insights that you wouldn’t get by talking to just mainstream customers — yet the insights are still applicable to the masses. For example, extreme customers for a gaming company might be the 19-year-old hacker who lives in their parents’ basement at one extreme and the grandfather who doesn’t even own a smartphone at the other.

The third method is deprivation and disruption. When we are helping a client innovate in a mature category, such as transportation, cereal or alcohol, it can be hard for customers to articulate any substantial unmet needs, frustrations or desires. To overcome this barrier we apply what we call deprivation and disruption research techniques.

Deprivation involves depriving the customer of a regular activity, product or brand and getting them to keep a diary of how it made them act, think and feel. Similar to the thinking behind researching extreme customers, this technique helps heighten the needs and pain points for the customer.

Disruption works well when you are innovating a physical or virtual space, or the product you’re working on is central to a physical or virtual space. For example, if you were looking for insights to redesign a workplace you could get employees to go and work in a different space for a week and keep a diary of all the things they missed (and didn’t miss) from their regular workspace, and what they liked and didn’t like about the new workspace.

The key thing to remember for all these techniques is that it is about finding inspiration for innovation, not market validation. Market sizing and validation come later in the innovation journey.

Cracking the insight

Observation and data alone aren’t enough. Insight requires curiosity, synthesising, and sense making to get to the underlying  ‘why’ behind customer’s behaviours and needs. When crafting insights I find it useful to write them as a customer-centric statement or narrative, consisting of three elements:

  1. A descriptive definition of the customer and the situation or context.
  2. Articulation of the need or problem the customer is trying to satisfy or solve.
  3. Distillation of the insight, that synthesis of their needs and why these are so important to the customer or why they are so hard to solve.

For example, the customer insight statement for Magnum ice cream may read something like this:

An indulgent foodie needs guaranteed satisfaction, because if the delivered pleasure falls short of the expectation it doesn’t justify the guilt.

As Clayton Christensen says, in his book Competing Against Luck, “you’re trying to capture the story of the customers in their moments of struggle or desire for progress”.

You’ll know when you have a good insight, because you can’t help but start to think of solutions for it. Good insights are interesting and inspire action. Cracking compelling insights is half the battle of innovation and the number one driver of innovation success.


Read more: What You Need to Know About Data in Marketing

About Nathan Baird

Nathan Baird is the founder of customer-driven innovation and growth firm Methodry and author of Innovator’s Playbook: How to create great products, services and experiences that your customers will love!

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