Understanding demand is essential for delivering solutions that meet real customer needs

Feedback Over Theory

Data Beats Opinion

Improving existing services or creating new ones is only effective with a thorough end-to-end understanding of the demand from customers. This understanding must be anchored in empirical data on past, present and future demand and real customers.

You can’t fly blind. You might get lucky but more than likely won’t.

Taking a responsible approach to service design means demand first has to be understood. So many organisations forget to do this, or just make it someone’s job in the hope that they will do it well.

All too often the air is filled with: “We know what they want”.

It is far too important for that: studying and learning from customer demand and the needs behind those demands is a central process that needs to involve everyone.

What can go wrong?

Let’s first look at what can go wrong when organisations fail to study demand effectively. We’ll look at the symptoms you can expect to see if your organisation is suffering from this.


Poor Service Design
Customers are struggling to use the service, complaints are rising and recent changes seem to have made things worse

Increased Failure Demand
Far from saving money as intended, our support costs are steadily increasing

Increased Waste
New technology was supposed to be cheaper to deploy, but service development costs are going through the roof

Poor Sales & Service Quality Metrics
We’re losing ground to the competition and across and our customer sat. is dropping like a stone


Assumptions are made that we know what is “good for” customers, where future demand will come from and that current services match existing demand.

A lack of direct knowledge of customer needs leads to incorrect assumptions and from these come poor service design.

The misalignment with customer needs increases support and maintenance costs, adding costs to the business on top of the costs of developing the wrong service features and the opportunity costs of not developing the right ones (which few people ever properly consider).

Over time sales drop and service quality metrics deteriorate leading to a negative spiral.

What can be done?

It doesn’t have to be like this. It is perfectly possible to follow an alternative pattern in your organisation that leads to a far better outcome. Let’s look together at what you could do instead and the positive consequences that will follow.


Improved Service Design
The new service update is getting a good reception, we’ve had some ‘finally!’ thanks messages and complaints are down

Reduced Failure Demand
Support costs have been decreasing and with less fire-fighting we’ve been able to put more effort into our knowledge-base and training activities

Reduced Waste
Development costs are down significantly because we now have a simpler service with fewer moving parts

Increased Sales & Service Quality Metrics
Sales are up and the market loves our new offerings, service quality is now at an all-time high


Customer demand is explicitly studied and quantified, real customers are sampled and involved in the process to ensure demand can be predicted as well as possible.

Direct data-driven knowledge of customer needs allows the development of the “best fit” service possible within constraints. A better service generates lower support overheads creating a virtuous circle of support improvements.

A full understanding of demand leads to a simpler and smaller service that does all key activities well. This in turn leads to rising sales and much better quality metrics.

How to get started

So how would you go about following this pattern in your organisation?

Take a single aspect or transaction type in the service and/or a subset of customers and follow steps (1-3) to extract data, study and classify. Then create an action plan and circulate for comments.

Let’s explore together how to break this down into some simple steps, how they work and build on each other to transform your approach to working with customer demand.

It takes time and effort to do this well but it is time and effort worth spending. The value produced in the quality of service improvements and fitness for customer needs will more than pay for the costs of setting up this process.

If you are not sure about all of this yet then why not try out the Toe Dipping option as a first step?


1. Extract Existing Service Demand Data
Harvest all available demand data from the existing service including calls, correspondence, IT systems. Don’t focus on transactions – focus on the end-to-end experience from the customer’s perspective.

2. Study, Explore and Sample Demand
Analyse the demand data and explore its shape and changes over time. Sample live demand to ensure current understandings are up-to-date.

3. Stratify and Classify Demand
Classify the demand along with its aspects and loads on the service into four principal types:

The four types of demand

a) Customer Demand – arising from genuine customer needs

b) Failure Demand1 – arising from a failure to provide a fit-for-purpose service to customers

c) Predictable Demand – demand that can be reliably predicted, including transaction types, volumes, cyclical variations with the calendar, etc…

d) Unpredictable Demand – demand that cannot be reliably predicted

4. Follow Demand Conclusions
Focus attention and take action to implement a service that:

Focus for the four types of demand

- Best matches (a)

- Eliminates (b)

- Is designed for (c)

- Can cope resiliently with (d)

5. Establish Ongoing Demand Monitoring
Set up continuous demand monitoring with automated demand data extraction and regular review to track changes in customer needs.


Why not embed a sample of your customers into the Study Demand process and put them in charge of deciding how well you are satisfying it? Let them form a steering group in partnership with you to drive changes and improvements. After all, who knows better than them both what is needed and how well you are doing?
Closing thoughts

If you want more detail, give me call. I can help tailor this approach to your organisation.

Good luck studying demand and do let me know how you get on, I’m always keen to hear.

  1. Failure demand is a term coined by John Seddon http://en.wikipedia.org/wiki/Failure_demand 

Posted in Demand, Involvement.

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