Customer Segmentation: Identify Your Customers’ Unmet Needs

The best way to identify and rank customers’ needs is to get your keister out of the office. Sitting in headquarters and trying to think like a customer won’t work, even if you bring in customers for focus groups.

Columbia Business School Professor Emeritus of Finance and Economics Larry Selden notes that what people say in focus groups doesn’t necessarily reflect what they really do. Sometimes customers don’t realize they have an unmet need, says Selden. For example, British Airways (BA) realized that many of its customers who were senior business executives were driven primarily by a desire to get a deal done, resulting in a need to rest and save time.

So British Airways tailored its services to help these executives get a decent night’s sleep onboard and get them on their way as quickly as possible after landing. On certain overnight flights, the airline serves them dinner before they board, giving them extra shut-eye during the flight. First-class passengers can change into a complimentary sweat suit and hang their business suits in a closet before climbing into a flat bed. In the morning, they can zip through customs, shower at the BA club in the airport and head to their meetings, bypassing the need to check into a hotel.

It’s unlikely that any of these executives would have expressed a need for a sweat suit. Selden insists that only by immersing yourself in the customer’s experience will you be able to observe such hidden needs.