Order Now

The Business Strategies

In today rapidly changing world it is of great importance to be able to keep a hand on the pulse of the time, to be flexible and to respond to the changes quickly. Business strategies are not the exception; to stay productive and competitive today each organization takes a lot of effort and looks for alternative solutions. Traditional schemes often fail to bring essential results today, as information technologies, globalization and other newly appearing factors present new rules of the game for each market player. That is why there is so much attention paid to different aspects of making business more prosperous and productive. It goes without saying that there are different strategies chosen by different organization, and different aspects the scholar research is centered on. Some of them are concerned with motivational and behavioral patterns; others keep working with organizational structures and human resources development. But after all, what is each business intended for, what goal does the owner first of all set? The profit is naturally the ultimate end, but to gain profit, the products should be sold. To be sold, these products must awake the interest of the customers. And eventually, to awake this interest these products must satisfy the needs of these customers. Hence, the analysis of customers needs, their investigation and research are especially important in providing effective production and effective outcomes. This importance is logically reflected in the studies of different research. In this way, we decided to compare the two works of two different researches, divided by almost a decade in time, as it may help us realize whether any shifts have taken place in understanding the issue of customer needs analysis.

So, the end of the twentieth century is presented by the article Discovering customer needs – four key questions by Bobby M. Phillips, PhD., while the end of the first decade of the twenty first century is presented by the investigation of customer-centric innovator Graham Hill on How to Put Customer Needs at the Centre of Business Strategy. Although both articles are devoted to the subject of customer needs, they are naturally different in approach and understanding of the matter. Both authors construct their discourse on the idea of needs-based innovation, and both of them agree that it is vitally important to understand customer (or consumer) needs, to evaluate them properly and to be able to apply the knowledge in working out new strategies for improving business outcomes (by producing “commercially viable solution”, as Phillips (1998, 47) calls it).

In fact, the two authors begin their reasoning from different points. While Phillips departs from classification of projects and efforts taken to succeed and related to the needs of the customs, Hill presents the notion the task of the manager is first of all to find a key to interpret the needs of the customers into some understandable code. Thus, Phillips tells about six types of potential efforts: (1) when the product will be purchased and it is clearly understood by the customers; (2) the customers do not have a clear view whether they will purchase, but they will because of an eye-opening solution of the company; (3) the customers have got no clue of the product, but again the eye-opening solution will influence them positively; (4) the customer will not purchase nevertheless the solution is technically successful; (5) the understanding is poor, and the customer will not purchase; (6) the ultimate purchasing decision is not supported by information motivation at all. Hence, Phillips makes a stress that the task is to escape the last three types and to work within the first three. While 30 percent of the projects, as Phillips presents, are not effective, the problem of proper needs assessment is evident. “This fact, alone, provides sufficient motivation for improving the processes involved in discovering customer needs,” he states (Phillips 1998, 47).

Meanwhile, Hill also presents customer needs assessment as one of the foundations of prosperous business. “Developing a deep, almost visceral understanding of what customers’ need lies at the heart of innovation to create winning new products and their marketing to target customers,” he underlines (Hill 2009, 60). Hill’s motivation to provide the investigation lied in the fact that to create a customer is the very purpose of any business. But at the same time Hill warns that it is not an easy task to understand and to assess the needs of the customers. Therefore, he presents a kind of recommendation on how to overcome misunderstanding and how to come closer to the decision. However, before producing recommendations, he tries to explain why it is a problem to get the knowledge of customers needs. Sometimes it is said that the customers simply do not realize their own wishes at all. In fact, sometimes it is really so, but the matter is their needs are usually expressed in other categories: in combination of expectations, desires, values, benefits and decisions. For a producer this mixture turns out to be a kind of Double Dutch. Therefore when the producer and the customer communicate about the needs, they turn out to speak in mutually incomprehensible languages.

Not knowing this approach, Dr. Phillips proposes a paradigm of information we can receive from the customers on their needs. This information is divided into four major pieces: information on “what” the problem is; information on “who” has the problem; information on how important the solution of the problem is and finally on how valuable this solution is. It is worthy to notice that further he describes how the answers to these questions maybe mixed. As for the first question, he concludes that it is highly important to define the problem better: “To maximize utility of the answer, the problem definition should contain a clear description to enable a decision about whether or not the expertise (competencies) of the supplier matches the problem” (Phillips 1998, 47). Secondly, he explains that there are three major owners of the problems: two of them are internal for organization (manufacturing and business customers) and one is external (the one paying for the product). It is recommended to keep balance. Next, the importance of the problem is assessed according to the “allocation of resources by any potential supplier.” Here customer’s trust and desire to share the “importance information” are believed to matter. Without sharing this information can also be gathered through the amounts of money, time and effort spent by customer as well as the attraction of other suppliers. Finally, profitability of any potential solution is a key to estimate the selling prices. “Competitive advantage can be achieved if shared understanding is reached between the customer and the supplier concerning the answers to these four questions,” Dr. Phillips sums up. Thus, both Phillips and Hill are joint in the opinion that much more often business managers have wrong views on the needs of the customers, though the reasons they apply to are different.

Hill’s logic is actually based on the works of Tony Ulwick and Clayton Christensen. Thus, he explains that all the people (referred as customers in our case) “live their lives in a constant struggle to get things done efficiently and effectively” (Hill 2009, 60). It means that to feel comfortable, safe and satisfied we need a lot of things to be fulfilled. These tasks we put for ourselves are called “jobs-to-be-done” by Hill. And it goes without saying that money, time and effort is spent to acquire various tools to have these jobs done. Hence, the needs come from a complex “combination of functional, personal and social jobs-to-be-done, each with a range of different outcomes that customers are trying to achieve” (Hill 2009, 60). This is where the author shifts from the customer-driven innovation (called “nebulous” here) to the outcome-driven innovation, which concentrates on concrete jobs which customers wish to do or to have done. It is pleasant to note that the theory presented by Hill is supported by eloquent examples from prosperous companies known worldwide today (like Microsoft or Bosch). For instance, the latter came up with differentiating between different groups of customers with corresponding different needs. It also seems worthy to quote Clayton Christensen who wrote: “the customer doesn’t actually want a drill at all, he wants a hole in a wall,” and that is probably the main thesis everyone should remember not to make mistakes in customer needs assessment.

To go on, at the end of their investigations, both authors come up with solutions on how to improve the situation with gaps in understanding of what the customers need. Thus, the solution Dr. Phillips proposes in order to make the customer needs analysis more effective, is to make the communication circular instead of linear. It means that the information collected through the process of assessment from different sources should be sent to the customer for verification. The last argument the author uses is statistics, according to which 50 percent of information is changed by customer after verification. Meanwhile, Hill sees the way out in giving up the idea we can get the information directly from the customers. Instead of that, he says, we should get deep and keen understanding of what jobs the customers try to get done, what holes and in what walls they want to have, in order to “provide a robust way to cut through the psychobabble of needs, wants, expectations, benefits and solutions” and to receive one simple language for describing the environment and the reality from the perspective of a customer. All in all, both works present systematic exploration on how things are and how they should be in the field of estimating the needs of customers for the sake of business strategies. We have also seen that the scientific and practical thought has pushed forward through the last decade and it provides a motive to hope for further development of appropriate strategies and methods.

Reference List

Brinkerhoff, R.O. (1987). Achieving Results from Training. San Francisco: Jossey-Bass Inc.
Gilbert, T. (1988). What Works at Work: Lessons from the Masters. Minneapolis: Lakewood Books.
Hill, Graham (2009). How to Put Customer Needs at the Centre of Business Strategy. R&D Innovator, 2 (10), p. 60.
Margolis, F.H., and Bell, C.R. (1989). Understanding Training: Perspectives & Practices. San Diego: University Associates.
Phillips, Bobby M. (1998). Discovering customer needs – four key questions. Innovative Leader, 7 (6), p. 47-48.
Steadham, S.V. (1980). Learning to Select a Needs Assessment Strategy. Training & Development Journal, 30, pp. 56-61.
Stout, D. (1995). Performance Analysis for Training. Niagara, WI: Niagara Paper Company.