How To Do Strategic Segmentation – Step 3: Identify Unmet Needs

This is the third in a three-part series explaining how to perform a strategic segmentation of your market/audience. If you haven’t yet you should read the introduction to strategic segmentation, the first post on segmenting the market, and the second post on understanding motivations.

Strategic segmentation is a process for developing strategies that appealing to specific customer groups, increasing you effectiveness in serving that group in a way that is both profitable and sustainable. The first two steps in the strategic segmentation process are to identify key audience characteristics that define subgroups and to understand the core motivations that influence how those subgroups will engage with your organization.

The next step in the strategic segmentation process is to identify any unmet needs that represent an opportunity (or a threat) for you to serve those customers. Unmet needs are important because they are the source of discontent (whether known or not) that will cause someone to want to change. If that person is already a customer, then unmet needs can be a threat because it may be their relationship with you that they change.

But the other side of the coin is that unmet needs are tremendous opportunities. Opportunities for you to serve your customer in a new way, strengthening and increasing the value of your relationship. Opportunities for you to meet that need and earn a new customer. While motivations shape a customers actions, unmet needs catalyze that action.

So how do you go about identifying unmet needs?

Identifying Unmet Needs

David Aaker suggests three methods for identifying unmet needs in his book Strategic Market Management (affliliate link):

1. Use Customers to Identify Unmet Needs
2. Imagine an Ideal Experience
3. Use Creative Thinking

Use Customers to Identify Unmet Needs

Customers can provide great insight into how well their needs are being met. The best tool for accessing customers is market research. Through individual or group interviews, you are able to explore aspects of the customers’ experience and begin to dig into what elements of the experience might not be fulfilling their needs. Good customer research will:

• capture the customer’s actual experience/usage;
• identify any problems or frustrations;
• identify places where the experience doesn’t live up to the customer’s expectations;
• identify ways which the experience falls short of experiences with other vendors;
• elicit feedback on ways the experience can be improved.

In addition to asking customers to share their experiences, there is tremendous value in observing customers as they engage with your products and services. Observing customers gives insight into product shortcomings and the other environmental factors that contribute to needs not being met.

Imagine an Ideal Experience

Customers’ self-identified needs are often influenced by the customers’ frame of mind toward their circumstances. Having users conceptualize their ideal experience is a great way to identify unmet needs that users value but might not identify as important.
The simple question “What would an ideal experience with us be like?” can help you understand what elements different customer groups value and then tailor your product or service to emphasize the positive aspects.

Use Creative Thinking

In addition to the potential for customers’ direct feedback to be biased by their worldview, self-identified needs (real and imagined) will often be constrained by convention. Often the best opportunities to add value to your customer groups come from thinking outside of the box.

In my previous post Creative Thinking for Dummies I laid out three principles to follow for effective creative thinking. They are:

1. Separate ideation from evaluation
2. Look at the situation from different angles
3. Create feedback loops for refining the best ideas

In addition, here are several techniques for inspiring creativity:

• Get multiple people to participate – the diversity in perspectives and backgrounds can inspire new ideas.
• Challenge obvious assumptions.
• Evaluate options based on the potential impact regardless of feasibility.
• Break the problem down into smaller parts or tasks.
• Use triggers (like a random word) to stimulate new lines of thought.

These techniques will help you to imagine potential new ways to meet unmet needs in your market.

Conclusion

Having identified customer sub-groups and explored their motivations and unmet needs, you’re now in a position design and develop new products and services to capture the opportunities that you’ve uncovered. It is important that your strategic planning process begin with this level of understanding about your market to maximize the effectiveness of your efforts.

If your organization needs help identifying your customers unmet needs, I offer a number of strategic customer research and analysis services that can help. Feel free to contact me here.

Question: What unmet needs exist in your church or business’s audience? What’s the strategic value to your organization for filling those needs?