improve your customer intimacy by understanding demand windows
Success today comes from not only knowing who your customers are, but also why they buy. It’s not enough to know your customers’ demographics (e.g., adults aged18-54) and category behaviors (what they currently buy, what products/brands they use). Even knowing your customers’ economic value (e.g., customers who spend $500+ in our category, companies that have more than 100 employees, etc.) isn’t as revealing as understanding what drives them to make a purchase. To understand customers’ motives — to improve your customer intimacy — you need to identify demand windows.
I learned about demand windows from an article in strategy+business written by folks at Strategy&, PwC’s strategy consulting group. The concept of demand windows builds on the needs-state segmentation approach I have been using and advocating for many years.
I first discovered the power of needs-states when I was leading the market research efforts for a fast food restaurant chain years ago. Needs-states are a combination of customers’ purchasing attitudes with their purchase occasions. For consumer products, customer attitudes include such purchase considerations as design-consciousness, price-sensitivity, or the desire for innovative products. Purchase occasions vary from impulse purchases to gift-giving to indulgence purchases to obligatory purchases. Needs-based segmentation allows for the fact that most individuals have more than one demand driver for products that they’re interested in.
When we went to segment our customers, we determined it would be most useful to connect with prospects at the moments when their needs for fast food were felt the most. We recognized that a single person may be in different situations during the course of a week and have different needs for each, so we determined the best way to address fast food customers was on the basis of needs-based usage occasions: “the don’t-have-much-money-and-need-a-quick-bite” occasion, the “socializing with friends and family” occasion, the “craving a particular menu item” occasion, etc. It was a much more realistic, insightful assessment of buying behavior and we were able to develop more effective new products and new marketing strategies. Since then, I’ve used need-state segmentation to help many companies identify and successfully tap into customer demand based on who needs what when.
But demand windows introduce a third dimension to achieving customer intimacy and understanding demand — where, as in the where customers are shopping for and buying your product. Demand windows are the specific situations (time and place) in which consumers want or need to make a purchase. Take basic consumer packaged goods. People can shop for them at supermarkets, warehouse stores, mass merchandisers, convenience stores, and a huge selection of e-commerce sites. And they engage with different brands and products in many different channels, including mobile apps and social media. Fortunately most marketers now have access to the data that can be used to develop insights their customers’ demand windows.
The Strategy& consultants write, “Demand windows open and close based on different factors at different times. Someone shopping for sandwich ingredients may choose one brand of deli meat when planning a child’s school lunch during a grocery store trip, but another when stopping at a deli to prepare a quick, healthy snack at home. Context is everything.” (emphasis mine)
This makes a lot of sense — especially as today’s customers encounter so many more sources of information and distraction during their purchase decisions. Analyses that factors in demand windows enable brands to figure out where and when customers are most likely to want them. And as the article suggests, demand windows open windows of opportunity — opportunities to tailor, analyze, and refine your sales and marketing efforts with greater precision and opportunities to create new products and services with specific features and benefits that specific customers want, delivered in the right context.
Together with attitudinal insights, you can use demand windows to find and engage the people who are most likely to want or need your brand. Demand windows allow marketers to appeal to customers with laser-like precision at the intersection of consumer, channel, and occasion that’s right for customers — and for your business. I’m looking forward to using this new insight as I help my clients improve their customer intimacy.