Thursday, September 07, 2006

Wants or Needs?

I've worked in marketing for quite a while, and it seems we marketers have a compunction about wants and needs. I think these are fairly poorly defined and often used synonymously. That presents a risk when we talk about the drivers for innovation.

I may want to lose weight, or I may need to lose weight. The first is an expression of interest, the second is a requirement. Too often we focus on what people say they want, rather than what they really need. Innovation is often too focused on what people say they want, and unfortunately history is littered with things that seemed to fulfill what customers said they wanted but were judged as market flops. Or, we as marketers can make assumptions about what people want, and bring new products and services to market based on those intuited wants. That is still very risky, as the wants are not expressed in terms of dollars or tradeoffs.

From an innovation perspective, what's important is to discover the needs that individuals, prospects and markets have, and translate those needs into features of a new product or service. There are several different types of needs:

- Unmet needs. I have a need that is not met by current products or services. For example, an inexpensive pump and filter to provide fresh, clean water to poor communities in third world countries.

- Somewhat met needs. For example, I have a need to travel quickly to distant locations, so I fly there. However, my experience based on most flights is less than satisfactory. That opened up the discount airline industry.

- Overmet needs. For example, any Microsoft Office product. There are more features than I can possibly use or even understand. It seems that someone soon will innovate a spreadsheet, a word processor or a project management application that is less complex and easier to use, with far fewer features and a lower price. Of course, Basecamp has done this for Project Management.

There's another way to look at wants and needs as well in the context of innovation. Most firms WANT to be considered innovators and WANT to increase revenues and margins, but NEED to cut costs. That's why many firms treat innovation as a cost cutting measure rather than a growth initiative. I was recently asked how we help firms rationalize an investment in innovation. My response was - from a marketer's perspective I'd like to talk and focus on growth, but from a needs perspective we look at the customer's situation. If their focus on idea management and innovation is driven by cost cutting, then that's the way we justify innovation.

As you consider your innovation initiative, what are your focus areas? Have you focused on what you think your customer wants, or what you know the market needs?
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posted by Jeffrey Phillips at 8:18 AM

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