Most businesses these days are under pressure to differentiate their products and services to attract new business. Although customers can play an important role in helping companies define their differentiation, a surprising number of businesses decide to skip this important customer research and launch offerings based on what "we think our customers want."

Companies risk building offerings that customers do not want to buy by bringing products and services to market without fully understanding what customer's need, why they need it and how they need to purchase it.

How can companies remain aligned with customer needs?

There are three critical and interdependent steps in the product and service development process. There are major risks in skipping any one of them entirely.

Step 1. Discovery: Finding out what customers really need

The goal of the Discovery step is to learn about customer needs and priorities and identify opportunities to meet these demands with new or enhanced products and services.

Through guided one-on-one or small-group discussions, customers describe their unmet needs and their willingness to pay to address these needs. For priority needs, customers also discuss their ideas for potential products and services.

The result of the Discovery step is a set of product and service concepts that deliver what customers need. After these concepts have been fully defined, they are ready to be shared with customers during the Definition step.

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ABOUT THE AUTHOR

Sherri Dorfman is the CEO of Stepping Stone Partners (www.stepping-stone.net).