Stuck in neutral? … Try eliciting latent needs

Sales people love to sell what their best customers want. However, most often what customers want are trivial tweaks on your standard product … with little or no price premium for the tweaks. You’re stuck in neutral, unable to shift into growing revenue with improved margins.

The “tyranny of the served market”1

Customer-led business units see the world only through the lens of satisfying the expressed needs of their current customers. One result is aggressive price competition as competitors also respond to the expressed needs. A second result is myopic R&D programs, short-term in focus and reactive.

Shifting out of neutral by eliciting latent needs

Market-oriented business units see the world through a lens that goes beyond satisfying current customers’ expressed needs. These business units elicit and understand both the expressed needs and the latent needs of customers in the target market. Unique insights gathered by elicitation can be used to outpace competitive offerings in the served market in both revenue growth and improved margins.

Eliciting latent needs from lead users in the target market sometimes provides unique information about advanced needs in markets that are alongside the target market. When followed by strong financial and managerial commitment, satisfying latent needs in these alongside markets also helps escape the tyranny of the served market.

1. (1998) S. F. Slater, J. C. Narver “Customer-Led and Market-Oriented: Let’s Not Confuse the Two” Strategic Management Journal 19 1001-1006

2 thoughts on “Stuck in neutral? … Try eliciting latent needs

  1. I like your focus on latent needs George. Here’s a question: is there any specific reason you would engage your own customers for their latent needs *if* they are also a target market for something new? I imagine large companies have sufficient numbers of customers such that they could turn to them “easily” (he said a bit too cavalierly) to elicit latent needs.


    1. Hutch,

      Great question!

      Large companies do engage their own customers to unearth latent needs in new-product-idea marketing research, often for the following two reasons.

      Reason 1: They already have (hopefully) a good track record in supplying a customer and this helps ease adoption of the new product within customers. Reason 2: They already know some key users and decision makers in their customers’ purchasing process

      In my experience in B2B marketing research, there are some cautions that should be kept in mind about Reason 2.
      A. The key individual whose problem your idea may solve is often not in the purchasing chain for current products and may not be known to links in the chain.
      B. You will always have your large company logo tattooed (figuratively) on your forehead and that can frame shallow answers when you elicit latent needs from your own customers.


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