[MUSIC] So one of the key steps in developing a new product or service is to identify the needs that your customers may have. And the reason this stage is so important is that we're looking to do something that competition is not doing, do something better than competition, or do something entirely new with the product or service that we're offering. So underlying the solution to the customer problems are both manifest and latent needs. And we're trying to tap into those needs to increase the chances that they will benefit from the product or service that we're developing. So in terms of identifying the customer needs, the first step is to identify the gap between the customers in terms of how they're currently solving their problems or the products that they have and a solution. Remember, we're looking to do better than competition, not just to match competition. Or to excite the customer about the product, not just make them think of this as another alternative. So in identifying those needs, we're looking for those hidden needs. Needs that have not come to the forefront in the previous opportunities for the customers to relate what they're looking for in a product, or what they're looking for in a service. So identifying those manifest needs, those unusual needs, things that will lead to an opportunity to develop more value for the customer based upon the needs and the benefits that they derive. Customers buy products based upon the benefits they're looking for, not necessarily based upon the needs that they have. They're looking to create more value in return for the products and services that they're purchasing. And in return, you're trying to make sure that no benefits are overlooked as you're trying to satisfy the customers with respect to those needs and services. Now finally, once we develop that understanding of what the customer needs for our particular product or our particular service, we're better able to create a solution, or a new product, or a new service that addresses those needs, and even the needs that they had for the product previously. So we would follow that development process that we talked about before, but in this case, we're at the first stage of new product development. Identifying an opportunity or identifying an idea that will solve that customer problem, but first we need to identify the needs that the customers really have. As we've done with previous processes, there's a beginning and the end. And the first point is to kind of have a scope of the overall problem that you're facing. So the first step in identifying customer needs is defining the scope of the problem that has been identified for that particular customer. Now once we have that problem, that decision problem, that research problem, and in this case, our research problem is to identify customer needs. We can begin to gather the data from customers that will help us to verbalize and write out that particular need. So after we've gathered the data from customers, we then have to interpret it in the context of the customer needs being satisfied, but also those new opportunities for new needs. So we identify the needs, we gather information, then we organize the needs into some type of priority. What's most important, what's least important, and what can we develop that would be market feasible, technically feasible, and economically feasible. In the end, we have some idea of what the importance is of the different needs that a customer may have for a product, or the different needs that they would list in terms of benefits that they're looking for in a service. So following this process, we are hoping to generate a laundry list of needs, but then to prioritize those needs based upon the product or solution. For example, let's take a simple product like a cordless screwdriver. So what's the relative word here that's important? It's cordless. Well, a hand driven screwdriver is cordless. But it's different from a battery-operated screwdriver. Now customers can achieve the function of screwing in a screw to a particular wood product or plastic product with any of these three alternatives. But each one provides different benefits. With the handheld, it's still cordless, and the hand powered one, it takes more power on the part of the customer to screw the products in. Whereas with the battery operated one at the top, it's less power, and probably can provide a tighter fit. But each of these carry different benefits. And depending upon the type of problem that you're having, each one may be a solution to the problem. But we're trying to identify a new product or service that will fit and solve the needs of the customers that's better than the existing alternatives. In this case, we begin with what is the scope of the problem that we're starting out with. Some people refer to this as your mission statement. Some people refer to it as your project charter. Some people refer to it as the project description. But you're trying to lay the boundaries of what you're looking at in terms of the problem you're facing. Now in that charter or in that project description, you want to be able to first describe the customer that you're targeting. So is it the everyday customer? Is it the professional customer? But who is the targeted customer for this product? And what is your goal in introducing the product? Now ultimately we're all interested in profits, but before you get to profits you may have other goals that you're trying to achieve. What are the critical needs that are currently being met and those that are not being met with the product in the marketplace? Are there any assumptions you have to make in terms of the context of the market, and are you able to do it by yourself or will you rely upon other stakeholders to get that product introduced and accepted in the marketplace? So this is a simple description of a product charter. And it's helping to provide you with direction on who the customer is, what their goals are, and what are the key criteria that you're attempting to address in solving that customer's problem. So for our screwdriver project, we're looking to develop a handheld battery device for installing screws. You're going after a handheld device because we know that people have problems with just a regular screwdriver where they have to use the power of their hand. Different types of customers may not have the same ability, and that leads to less effective tightening of screws. The benefit proposition for our product, what makes our product unique, is that our screwdriver is tougher than other products, and has a stronger drill bit which leads to a bigger torque and a bigger opportunity when you're tightening the product. Our goal is to launch this product by the end of the year, and we're targeting do-it-yourself customers. The assumptions that we make is that it has to be handheld, it has to work on hybrid power, and it relies upon hybrid battery technology. So what this means is, as the user is tightening the product, it will work off the battery. But as you are using your hand, you are actually charging the battery as it goes along. Now the stakeholders here in this case are our target markets. We rely upon do-it-yourself customers as the primary market. And we want to sell it primarily through online retailers. And we don't want to have any responsibility for making it, so we're going to contract out the manufacturing of the product to someone else. What we're providing is the idea, the tool, and the marketing of the tool. So that's our basic project charter and describes the project that we're trying to entail. So the next step is gathering gathering data from our customers. And here we have to make some choices. Do we identify the typical customers or users, or do we try to focus in on the professional and use that information to develop the product? Once we have an idea of who the customers are, we then can develop our questions that will draw out the needs from the customer groups. And that could be just one common customer or it can be a variety of potential customers to get a variety of needs. Once we have our set of questions, and we know what information we're looking for, we can decide on whether we want to use a qualitative technique, a quantitative technique, whether we use a personal survey or whether we use a focus group to gather the information. In any of the information that we capture, we want to make sure that we get written documentation of customer needs, whether it's written statements, whether they're voicing it, whether it's a recording of their comment. But we want to use that as our raw data to identify the underlying needs in the marketplace. Now once we have that raw data, we can compile a final written list of customer statements that we then interpret in terms of the needs. So the step two in the process, we're just gathering the data based upon who the customer is, what questions we want to ask, and the message of inquiry that we'll use. The next step leads us to the type of interview. Here, again, we can do either more qualitative or more quantitative customer interviews. But either of those approaches, you need to have a list of the questions that you're going to ask ahead of time. Generally, if you're at the exploratory stage of identifying needs, you will use more open-ended versus close-ended questions. So an example would be, how do you normally use a screwdriver? When you've used screwdrivers in the past, what problems have you faced? You're not looking for a response in terms of yes or no, but you're looking for them to elaborate on their experiences, their needs, what they're seeking in terms of benefits from the product. The objective here is to get the customer to talk about their use of the product, both their satisfaction and their dissatisfaction. Or what they like about it and what problems they have about it. And the key here is the amount of time you spend with each customer. The longer you spend with the customer, the less likely you're going to get effective responses. So you want to have a short list of questions that you're asking each particular customer. The next step then, once we have that data, is to interpret that data in terms of customer needs, translating or interpreting what the customer says into need statements that you can use to help guide your decision regarding developing your product concept. So you want to be able to express in terms of what the product will do, not how it will do it. So you're looking at the benefits and not the process. So you want to limit your interpretation to the data that the customer have and not add to it. And generally, you want to use positive statements rather than negative statements. The more positive statements, the more likely you're going to generate a larger list. Expressing the need as a product attribute or benefit, so taking what the customer has said and translating it and interpreting it as a particular product attribute that you can identify associated with your product. Or a benefit that you can associate with that particular characteristic that the customers identify. Finally, avoid the words must and want. What you're looking for is an open dialogue, and not limited to those that the customer thinks are most important. You'll get the importance of these items later as we go along the technique. But you're trying to develop a laundry list of needs, not what's the most important needs that the customer is looking for. Now as we move from step three, one of the things you would do is take those customer statements and reinterpret it in terms of the customer need. So for example, this is example data from the customers that we have, that have used the product. Statement one, I need a screwdriver with drill bits that do not snap so easily. Reinterpreting that, we can say as a product attribute, the new driver uses tougher solid carbide as drill bits. So that's an attribute of the product that reflects that customer statement. A second example is I need a screwdriver that gives me more control over the speed. Our attribute, the NewDriver employs a 21 clutch system that varies the speed of the particular drill that you're drilling. The third example is I need a screwdriver that is lighter in my hand. The attribute, the NewDriver uses an ultra light lithium-ion battery instead of nickel-metal hydride battery, which leads to a lighter touch. So you can see what we're trying to do is take the customer needs and re-translate it into technical attributes or product benefits that we can associate with our product. Then the following step would be to organize all of those needs into different hierarchies, trying to eliminate those things that are redundant, trying to identify similarities by grouping them into similar groups. And usually what you could use is either a sticky note or write them on an index card, and then stack those similar needs together. Or you could even have customers perform the action for you. How would you organize these into similar sets of needs? And you're looking for the higher groups of similar needs based upon the grouping of those needs. Now once you have those groups, you're able to then have customers prioritize the groups of needs as being most important, rank ordering the set of needs rather than rank ordering each individual needs. So then you end up with four stacks of needs, okay? And each of those will represent kind of a different category that you can translate into your product concept. Step 5 will then have you establish that importance. And a simple way is to go to a customer, have them rank order it, give them voting privileges, give them three votes and have them rank order the products that you have. By voting, that helps to identify their primary needs and those needs that exist at the same level based upon those groupings of needs that you have. You can either use individual personal interviews or you can use a focus group or you can even use a word survey that's mailed out to them to do these rank orderings at that point. The next step would be to prioritize that information once you get it back from the customer, title the groups based upon the particular benefit or characteristics as it relates to your product internally. Decide on what's the most important based upon your capabilities, and then develop your product concept. Ultimately at the end, we're hoping to have a product concept that identifies your particular product based upon the input that you've gotten from the customers. Now in developing your product concept, you want to be able to state the customer problem, state the solution to the problem, and then provide supporting evidence in terms of the benefits that your product provides in solving the problem. These three steps helps to identify a succinct product statement or product concept statement that then can be used for testing later on. So for example, in developing our screwdriver, we come up with the concept that NewDriver is a multi-purpose power grip electric screwdriver able to last four hours on a single charge. Given that concept, we'll now have a physical rendering of the product, at least this illustration, backed up by the key benefits that had been identified in a customer insight survey as being the most important. And now we can move on to the next stage of developing that concept. So if we refer back to our product development process that we talked about earlier, we are now at the concept development stage that we can go out and test the concept with a physical rendering of the product to better understand whether it's feasible from a customer standpoint. Is this the concept that would be one that they're willing to accept? Is it technically feasible given the criteria that we've talked about in the product? And then finally, is it economically feasible? So using our stage gate approach, we're at the concept development and testing stage of the initial idea that we developed for the screwdriver. So whether you're talking about a food truck, a solar oven, a software application, or a product that you have in mind, what I would like you to be thinking of is in terms of what stage in the process that you're at. And how you've gathered the information to evaluate the customer feasibility, the technical feasibility, and the economic feasibility. Remember that the objective here in conducting customer insight research is to make informed decisions about whether to move forward with the development of that particular concept. And to make sure that we ensure the long-term success of the product once it's introduced into the marketplace. [MUSIC]
