Customer needs

A customer is an individual or another business that buys goods or services from a business. Customers have needs: what a good or service must offer, and how it must be sold, for them to be willing to buy it.

The four main customer needs are price, quality, choice and convenience.

The needs are linked. A bag that is cheap but falls apart quickly fails the quality need, and one that is strong but sold in a single plain design fails the choice need. A shop that has the bag in stock and is easy to reach meets the convenience need.

A business can be a customer too. A café buying coffee beans is a customer of its supplier, and its needs may include a trade price, consistent quality, a choice of roasts and reliable delivery.

Value for money means a customer feels the price is fair for what they receive. Most customers want good value rather than simply the lowest price. They weigh up the cost against quality, how long an item will last, how useful it is and how pleasant the buying experience is.

Price and perceived quality

A low price does not always mean poor quality, and a high price does not always mean high quality. A cheap item may be basic but well made, while an expensive one may be poorly made or carry a high price because of a famous brand. Perceived quality is what a customer believes about how good a product or service is. That belief can come from price, packaging, reviews, the shop or earlier experience, so it may not match the real quality.

For example, two backpacks are sold in the same town. One costs £20 and has simple but strong stitching. The other costs £60 and has a well-known logo, but a weak zip. A customer who only carries books twice a week may see the £20 bag as excellent value. A daily cyclist in heavy rain may see the £60 bag as poor value if it lets water in, even though it cost more.

Quality is subjective

Quality is subjective, which means it depends on the customer's own judgement. One person may judge a backpack by waterproof fabric, another by comfort, and another by colour or brand. They can look at the same product and reach different conclusions about whether it is good value. This helps explain why a business cannot assume that the lowest price will attract every customer, or that a high price will convince everyone of quality.

Convenience means making it quick and easy for a customer to buy. As well as location and delivery, convenience includes availability, payment options and finance options.

Availability convenience

Availability convenience means the product is in stock, or the service can be provided, at the moment the customer needs it. A customer who travels to a shop and finds the shelf empty has wasted time and effort, so they often buy from a rival instead – and they may not come back. For a service, availability is about having a free appointment slot or a member of staff ready, not just having goods on a shelf.

So a print shop that promises posters within a day needs enough paper, ink and staff to keep that promise. Convenience is not only about location: being easy to reach is useless if what you want is not there when you get there.

Payment convenience

Payment convenience means accepting the payment methods customers want to use, and offering finance options where they help. Taking more than one method means a customer is not turned away because they cannot pay the way the business prefers, and a quick payment step keeps the queue moving at busy times – a long wait at the till can lose a sale the business has already worked to win.

A finance option, such as paying in monthly instalments, lets a customer buy something expensive they could not pay for in one go. That can turn someone browsing into a buyer for a high-value item, like a £520 drum kit paid over ten months. The customer still owes the full amount, though, and spreading the cost can mean extra fees or the risk of missed payments.

Customer needs are the things a customer requires from a good or service before they are willing to buy it. Different customers want different things: someone buying a birthday cake wants it to taste good and be ready on time, while a café buying cakes to resell wants a low price so it can sell them on at a profit. Because needs differ, a business must identify its target customer — the group it aims to sell to — and then work out what that group actually wants.

The right combination

Customer needs are usually summed up as price, quality, choice and convenience. A business has to get the right combination of these four for its target customer, rather than being best at just one.

• Price — a fair amount for what the customer gets. Most customers want good value, not simply the lowest price.
• Quality — the item works properly, is well made and lasts as long as the customer expects.
• Choice — a suitable range of sizes, colours or flavours. Too much choice can confuse customers and tie up money in stock.
• Convenience — buying is quick and easy, for example the product is easy to reach or in stock when the customer wants it.

Why it matters

If a business provides what its target customers want, they are more likely to buy from it rather than a rival. That generates sales, and sales are what allow a business to cover its costs and survive. Getting needs right makes sales more likely, but it does not guarantee survival on its own — poor cash flow or strong competition can still cause problems.

For example, a bakery next to a secondary school targets students with little time and only a few pounds at break. A wide range of £6 cakes would not suit them, however good the quality. Instead it sells a few fresh pastries at £1.50 and opens before school starts, so students get value, freshness, simple choice and speed.