Many businesses invest heavily in developing new products or services, only to find that customers are not interested. At White Space Strategy, we see this pattern often: a product is built because it can be, not because anyone has asked for it. The result could be a happy accident, or it could be that you end up with a product in search of a market on your hands….
Customer needs analysis is a practical way to avoid this outcome. By understanding what your customers need throughout the innovation process, you can generate better ideas, prioritise what matters and refine your concepts for market success.
Customer Needs Analysis Across the Innovation Process
Exploring customer needs can play a useful role at every stage of innovation:
1. Idea Generation
Understanding unmet needs is a rich source of ideas for new products, services, or ways of working. By talking to customers, you can spot pain points and gaps in the market that are not obvious from internal discussions alone.
- Interview customers about their biggest challenges or frustrations with existing solutions
- Collect feedback from sales and support teams
Example:
We worked with a geospatial data business who wanted to come up with ideas for new products and services which would sit on top of their data.
We started by engaging with the market about priorities, objectives and unmet needs in the area our client was interested in. We used these ‘jobs to be done’ in a series of brainstorming sessions with client subject matter experts.
This approach meant that all ideas and concepts grew from things customers would find attractive rather than existing capabilities of the data or the team, or concepts adjacent to existing products and services.
2. Prioritising Early-Stage Ideas
Not all ideas are equal. A solid view of what customers need, and which needs are most urgent, helps you decide which ideas to develop further. Knowing which needs are already well met in the market also helps you focus on differentiated opportunities.
- Ranking customer needs by importance and urgency will help filter your ideas
Example:
When working with a packaging manufacturer to develop new solutions, we had outlined a large number of potential innovations.
By understanding the needs each innovation was meeting in terms of whether it is currently met, and how important it was to the experts who had mentioned it, we were able to map innovations based on likely attractiveness in the market.
When mapped on a 2×2 grid showing attractiveness and ease to develop, we grouped innovations into ‘just do it’, ‘develop now’, and ‘park for later’, with customer needs at the core of this process.
3. Refining Concepts for Market
As you move from idea to concept, take your solutions back to customers. Ask direct questions: “Would this meet your need for X?” and “How could it be improved?” This feedback helps you refine your offer and avoid investing in dead ends.
- Prototype and test with real users
- Gather feedback on usability and value
- Adjust your concept based on what you learn
Example:
We carried out a project with a gas distributor exploring how they could support local authorities with their local planning processes and help them access information about green gases including hydrogen.
By working with the client team and drawing on insight from potential local authority partners, we co-created a set of propositions that our client could build out. We created brief explainers and took these back to local authorities for comment.
In 30 min video calls, we were able to run through the planned propositions and understand where the plans met needs and where they didn’t quite hit the mark. Experts also suggested further improvements that could be made to make the concepts more attractive.
The result was that our client had a high level of confidence to invest in these propositions as we knew they would meet the needs of the market and be pitched in appropriate language, targeting the right elements to deliver value to local authorities.
Avoiding Common Pitfalls
Skipping customer needs analysis can lead to costly mistakes. Common pitfalls include:
- Developing products based on internal assumptions, not market reality
- Focusing on technical features rather than solving real problems
- Missing out on anchor customers who could help validate and promote your product
By making customer needs analysis a core part of your innovation process, you reduce these risks and improve your outcomes.
Key Points to Remember
- Customer needs analysis should guide every stage of product and service innovation
- Use customer input to generate ideas, prioritise what matters and refine your concepts
- Avoid relying only on internal views – test your assumptions with real users
- Real-world examples show that customer-driven innovation leads to better results
If you need support with customer needs analysis or any aspect of innovation strategy, White Space Strategy is here to help. We specialise in market entry strategy, opportunity identification, competitor analysis and more.
Get in touch to discuss how we can support your next move.