Strategic Value & Disruptive Implications of Unmet Customer Needs

Just like what any curious person would have done, I stood up from my leaned-back chair, walked towards the corner of the room, took out the big brown paper folder that appeared odd and looked out of place from a distance.

I had earlier planned to rearrange my "reserved and sacred" bookshelf that's stacked with old documents and paper folders over the weekend to avoid becoming the typical "bits" hoarder.

Lifting the bag from the bookshelf satiated my inquisitiveness but I wasn’t done with my “dusting-off” at that moment.

So, I opened the big brown folder, skimmed through the pile of documents inside to browse through its contents and dispose of anything I deemed outdated and irrelevant.

It was during this mundane task that I came across a series of creased notes, jottings, scribbled notes of questions, printed minutes of team meetings, structured notes and interviews I had directed.

These were the personal archive of the inferences deduced from a project and research initiative I had conducted a few years back in a company on the unmet customer needs and resultant action steps.

Few seconds of browsing through the old documents soon grew into minutes, and the minutes became a few hours of rumination on the scripted insights.

I shortly realized that the stack of documents was definitely worth keeping and digitizing the practical insights I had garnered on the strategic value of unmet customer needs, the implications, discovery (identifying) and the responsive actions to take.

This was much of a reality check on the practicality of every business' unmet customer needs and how it ties to the cores of business growth, sustainability, and innovation at large.

I have simplified this article into two publication parts.

The first one, which is this, grounds the strategic significance and implications of unmet customer needs and builds into the second part later in which I go into specifics (discovery or identification and responsive action to take).

Moreover, you'll be amazed at how much we could achieve by applying the basic principles, utilizing simple tools, engagement plans and requisite efforts with applied intuition and creativity plus a willing drive as related to our varying business context or situation.

What are Unmet Customer Needs?

Let’s face it. No matter what industry you may find yourself in, no customer will think about buying a product or a service from you unless they actually need it or at least think they need it.

People or  customers buy products or engage services to solve a problem or get their needs met.

Therefore, the success of every company or business is dependent on the understanding of its customer needs and the ability to create products and services that address unmet customer needs.

So, what are unmet customer needs?

These are needs that are not currently being met by existing or current product and service offerings – the desired outcome of how customer defines value and measure success in clear-cut dimensions that are non-existent at the present time and in relative terms.

Implications of Unmet Customer Needs

1.    Opportunities:

Unmet customer needs are strategically important because they represent opportunities for organizations and businesses to sustain their competitive position, increase their market share, provides a lever for continuous innovation with effective resonance with the customer and creates an avenue to enter adjacent markets.

2.    Threats:

Alternatively, the unmet customer needs also imply threats to established companies and businesses as they represent a lever for competitors to break into a market or disrupt an established company’s position or provide a market access point for potential entrant and entrepreneurial agents at a much lower pedestal to shrinking the existing business’ market share.

3.    Characteristics:

Typically, unmet customer needs that are valid:

• are usually not obvious in current metrics of observation
• are somewhat difficult to identify straightforward
• seems illogical at first
• are "greyed out" in relation to held assumptions

However, unmet customer needs usually represent greater opportunities for an aggressive entrant or take-over that's predicated on business growth.

The reasoning for this is based on the fact that the new entrant's take-off on a newly uncovered customer needs in an industry bears little or no pressure on established companies and businesses in such sector to be responsive in time or to make alterations to their current strategy or products/services offerings to accommodate such newly identified need(s) by the new entrant in the same sector as they are often difficult to figure out at its onset as juxtaposed by the sheer characteristics of unmet customer needs (see "Characteristics section" above).

Thus, this gives an explanation to companies or new entrants that have outmaneuvered well-established organizations within their industry and sector.

A Classic Example & Present-Day Examples You Probably Know

A Relatable Classic Example:

A classic example of how an unmet customer need was uncovered and implemented for a disruptive innovation that created a new market and value network and eventually displaced established market-leading firms, products, and alliances is that of Henry Ford, the founder of the Ford Motor Company, and the sponsor of the development of the assembly line technique of mass production for the automobile.

Ford identified a customer unmet need for affordable and durable automobile for the mass-market in contrary to what was believed in existing offerings in the industry then.

This uncovered customer need led to his introduction of the Model T automobile – the first automobile that many middle-class Americans could afford.

Even though Henry Ford neither invented the automobile nor the assembly line, he adapted the assembly line process for his product offering (the Model T), which allowed him to manufacture, market and sell the Model T automobile at a much lower price than his competition, and thus enabled the creation of a new and growing market.

Remarkably With this move, Ford converted the automobile from an expensive curiosity into a practical conveyance that would further revolutionize transportation and the American industry and profoundly impact the 20th Century landscape as a whole.

?Some Present-Day Examples:

Today, there are many well-known examples of companies, businesses, start-ups, SMEs, entrepreneurs, and people who have uncovered a non-obvious but simple unmet customer needs in a tight competitive space and market that was once believed to be over-saturated.

Several examples of new entrants and companies that used newly identified unmet customer needs to their advantage are all around for us to learn from.

Without necessarily mentioning particular companies, we all knew what happened how some uncovered customer needs have led to the provision of some revolutionary services/products today. From unconventional centralized marketplace platforms arrived, the production of stylish electric cars, an uncovered unmet customer need in the highly structured taxi/passenger transportation market, to the simple user-interface of our mobile phones, and many more.

Don't Confuse Customer Needs with Solutions - Unmet Customer Needs are NOT Product/Service Feature or Ideas

Oftentimes, you would have heard that customers are usually not aware of their unmet needs and many C-level executives that hold this mistaken belief about the customers are one of the key reasons why many organizations and businesses struggle to grow or innovate.

The main reason this belief has been long-held according to Anthony Ulwick in his landmark "strategy and innovation process", Outcome-Driven Innovation is that the common confusion of customer needs with solutions, product or service feature or idea. 

This myth or false assumption that needs can be solutions came from a product-centric mindset and a traditional outlook or methods for uncovering unmet customer needs and usually, this is expensive and do not work.

In other words, customers don’t know what solutions that will help get their “job done’ best or meet those needs nor should they do.

The reason for this lies in the fact that customers habitually become much accustomed to the implicit limitations of the existing solution (product/service) offerings.

Innovation & Growth Lever - Uncover to Further Upon 

Hence, it is up to you or your company or business to uncover your sectoral/adjacent/present industry or anticipated area of unmet customer needs to further upon and use as a lever to channel your innovation or growth, or disrupt your market area or sustain your competitive edge as applied to your company and business.

Without a doubt, you’d have realized that the strategic value of unmet customer needs present varied opportunities, threats, channel and levers for disruption, innovation, growth and a whole bunch of related metrics.

Stay-tuned for the continuing second part of this publication with details into the simple approaches that could be used in uncovering and identification of unmet customer needs along with responsive actions to take. 

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