Tech-Enabled Services Versus SaaS Business Model: Key Metrics
Discover how tech-enabled services compare to a SaaS business model, exploring how they differ on key metrics
TABLE OF CONTENTS
Customer Unmet Needs: Key Building Blocks
Dive into customer unmet needs to craft compelling messaging with our template for social impact leaders.
Understand how Customer Unmet Needs is at the heart of compelling messaging and positioning with our template.
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This is a series about building and refining your messaging and positioning
#1 - Series Intro: (i) Messaging & Positioning Template & (ii) 5 Expert Tips
#2 - Messaging & Positioning Template: (i) Customer Unmet Needs & (ii) Persona Worksheet
#3 - Messaging & Positioning Template: (i) Ideal Client & (ii) Ideal Client Worksheet
#4 - Messaging & Positioning Template: (i) Differentiators & (ii) Value Proposition Worksheet
#5 - Messaging & Positioning Template: Market Category
#6 - Overcoming Objections to Positioning: (i) Proof; (ii) Workflow Redesign; (iii) Offers
#7 - Messaging & Positioning Process: Testing
#8 - Messaging & Positioning Process: Learning from Data
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Customer Unmet Needs: A Critical Opportunity
While the unique qualities of your offerings may seem obvious to you, customers often struggle to understand them or find them valuable.
The first step to solving this problem is to have a clear and compelling statement of the Customer Unmet Needs you address.
(This is also sometimes called a “market gap,” but I prefer the term "customer unmet needs" as it focuses on specific customer segments experiences.)
Getting this right helps your buyers understand your relevance to their lives. If you don’t nail this, they won’t read on further about your solution.
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What Are Customer Unmet Needs?
Building on our previous exploration of niching down, we now turn to a critical concept that can enhance your positioning: Customer Unmet Needs.
This is the gap between customer outcomes and existing solutions is where you want to explore.
Identifying true unmet needs is both an art and a science.
While customers often voice dissatisfaction, the challenge lies in distinguishing between action-driving issues and mere annoyances.
To master this crucial skill, focus on the key areas in the formulation below, which serves as a starting point for your iterations.
I’ll describe what each bracketed item means in turn below.
Part 1: Customer
Part 2: Unmet Needs
Get [Dream outcome] [without top 1-2 biggest limitations of / problems with today’s solutions or workarounds]
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Part 1: The Customer in Customer Unmet Needs
Even though these items are the first part of the positioning statement formula, they will not be the main focus of this post. However, I am including and prefacing them because they are the starting point of the formula, so you understand what this involves.
1) Market Category
We'll explore how to identify your relevant market category later in the series.
This category succinctly summarizes your business's purpose for your audience and is positioned first in the formula.
However, crafting an effective summary requires a deep understanding of your value proposition, which we will build as we progress through this series.
2) Ideal Client
Identifying your target segment is the foundation of the entire value proposition pyramid.
Different markets have different unmet needs and constraints, requiring tailored messaging. If you change your market later, you will need to revise your entire value proposition.
⚠️ To use your time efficiently, clarify your ideal client profile first before continuing the exercises below (but feel free to skim/read the rest of this post so you understand what’s upcoming). This is the foundation of the entire messaging and positioning template Being thoughtful here will save you work in the long run. ⚠️
Here’s a running example of an ideal segment we’ll reference throughout the series: community health fundraisers (group) who want to create personalized donor campaigns (workflow).
3) Workflow or Use Case
Although the formula includes this upfront to give readers a quick understanding of what you do, choosing the right one comes later in your analysis of your dream outcome.
In short, a use case or workflow is the specific set of activities or actions needed to achieve your dream outcome. For example, an annual appeal could be a workflow to achieve the outcomes of donor retention or fundraising a specific amount.
Later in the series, we’ll take a deeper dive into the critical concept of workflows.
Part 2: Unmet Needs in Customer Unmet Needs
There are three components to clearly identifying customer unmet needs:
- Dream outcome: Where do they want to go?
- Workflow: What do they do today?
- Limitations: What are the top issues with existing solutions and workarounds?
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Each of these are reviewed in turn below.
1) Customer Unmet Needs Formula: Dream Outcome
A dream outcome is ultimately the end state your customer wants to achieve.
At first glance, this might seem easy to answer.
But this can be an incredibly tricky item to nail concisely if you lack deep insight into your target market.
It is the first component of the Unmet Needs formula.
Part 1: Customer
Part 2: Unmet Needs
Get [Dream outcome] [without top 1-2 biggest limitations of / problems with today’s solutions or workarounds]
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To help you articulate your dream outcome, I’ve identified four key elements that make up a good dream outcome. In short, a good dream outcome is:
- Specific, instead of generic
- Core, instead of superficial
- Unmet, instead of resolved
- Urgent, instead of trivial
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As you try the exercises below, draw from real data about your target segment — again, diving deep into your best customer or prospect segments.
For instance:
- Dig up your sales and customer notes and look for patterns from your best customers
- Look discussions on online groups and forums where your target segment hangs out
- Talk to your target segment directly (I have more guidance on that later in the series here: Testing: Messaging and Positioning Template)
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A) A Good Dream Outcome Is Specific
Define targets, the relevant workflow, and ideal end result
How would they specifically define what “good” looks like for the area of improvement they most need help with?
This creates enough specificity to target a particular audience with a clear vision of their desired end result.
Example: Your target segment might say their top unmet need — where they seek more help and improvement — involves fundraising and donations.
There’s a major problem, what does that actually mean?
i) Success Target
By asking them how they are defining progress on this need, you might get the answer “reduce donor churn by 20% in the next year.”
Now you understand they really mean “donor churn” when they were asking about fundraising and donations
ii) Ideal End State
Understand why their outcome ultimately matters to them. Ask your target what achieving success would look like in a perfect world and why it is meaningful to them.
This is especially important for audiences where emotions play a key role, such as in social impact or business-to-consumer contexts.
For example, asking this question might elicit a response like: "In a perfect world, achieving this target means we have not only raised more money but also built a vibrant community of passionate donors who feel deeply connected to our mission. This engagement would lead to higher attendance at events, more volunteers stepping up to help, and donors actively sharing our mission with their networks.”
Clearly, the nonprofit prioritizes creating feelings of value, appreciation, and connection within a community united by purpose.
These insights can guide how you frame your dream outcome phase. For instance, instead of focusing solely on “increasing donor engagement,” you could emphasize building a “thriving donor community” that aligns with these values.
B) A Good Dream Outcome Is Core
Identify the stakes.
Understand the consequences of inaction – and the rewards of solving the problem. The more concrete and significant these outcomes, the more vital the need.
Look for potential losses (or opportunity costs) in wealth, relationships, or health as indicators of truly pressing issues (in the B2B context, wealth and relationships are typically most relevant).
For example, consider if they risk losing (or have the opportunity to gain) millions in grant funding, revenue from major donors or clients, or crucial accreditations needed to remain in (or start lucrative new) business.
Remember, the most critical problems typically have substantial financial or emotional implications that outweigh the costs of adopting new solutions.
In reality, 95% of complaints often don't represent true problems. They're usually just annoyances people can live with.
C) A Good Dream Outcome Is Unmet
Identify common intensely-desired improvement areas in your segment.
Pinpoint the one or two areas where customers actively seek better solutions. This focus will guide you to the most impactful opportunities for innovation with less resistance.
We're looking for areas where customers feel they need help or improvement, not just what they consider important. This distinction is crucial in identifying truly unmet needs because it suggests existing solutions or workarounds – your de facto competitors – are not doing their job. That's where you have an opportunity to help achieve their most important outcomes.
There is an additional benefit: you are meeting them where they are. The alternative is trying to convince people to address unrelated areas they do not believe they need help with today. While there may be value in challenging their perspective—especially if you strongly believe the need is the root cause of their issues—you will face a much steeper uphill battle. That might be a step you can take after you’ve built sufficient trust with them.
Let’s go back to our running example:
Our ideal client profile might initially say in an interview that they value programmatic impact; in fact, it is core to their mission.
But when you dig deeper into the top areas where they need help, that item does not come up. They feel confident about programmatic impact due to an extremely capable and well-funded programs team.
Instead, they bring up fundraising from donors. They are struggling to improve this despite trying many different solutions.
This signals a capability they are less able to manage internally and would likely be open to external help, such as your solution.
Here’s another example of how Apple iTunes addressed an unmet need:
Before iTunes launched, rampant piracy on platforms like Napster exposed a major gap in the music industry: consumers wanted easy access to music without the legal risks of illegal downloads.
iTunes addressed this need by creating a legal platform for purchasing individual songs, allowing users to access music conveniently and legally without having to buy entire albums.
This model tapped into a growing preference for single tracks over full albums, effectively addressing unmet customer needs for flexibility and accessibility in music consumption.
D) A Good Dream Outcome Is Urgent
Assess the level of active problem solving today.
Urgency reflects a pressing need for solutions, requiring immediate action.
A key indicator is significant, active, and frequent problem solving, along with investments focused on addressing the issue.
Organizations recognize the urgency of such situations and prioritize resources to develop strategies and implement solutions that deliver quick and impactful results.
For example, imagine a nonprofit clinic facing a sudden outbreak of a contagious disease. The staff rapidly assembles a task force, implements emergency protocols, and collaborates with local health authorities to contain the spread within 48 hours.
In contrast, less urgent outcomes typically receive far less attention and active problem solving.
For instance, a health nonprofit experiencing a gradual decline in volunteer participation may approach the issue with periodic meetings and long-term planning rather than immediate, intensive efforts.
E) Dream Outcomes: Prioritize Which to Focus On
From the exercises above, you will have gathered a large list of outcomes.
For your Customer Unmet Needs Formula, choose just one core outcome to focus on.
If your top outcome is obvious after reading this section, great — skip this step.
If not, list the top contenders and prioritize them using criteria similar to those mentioned. I recommend the criteria below, which align with the concepts I just shared. To simplify this, start with a straightforward 1-4 (high) scale for each criterion. After identifying the highest scoring items, you can add more details or consider the secondary criteria below.
- (Core) Quantify potential losses: Estimate the current impact on your mission or financial sustainability (revenue or expenses) if not addressed.
- (Unmet) Frequent desire for help: Consider if those closest to the issue (e.g., your frontline staff or beneficiaries) frequently and deeply want help with this more than other items that theoretically cause larger potential losses.
- (Urgent) Active problem solving: Assess how much active problem solving and investment has already been devoted to this need.
In the accompanying worksheet, I have examples of a structured table that can assist with prioritization. (Here's another example of how such a prioritization table can look, if you do not want to look at the worksheet.)
If it is still hard to choose, consider these tie breakers or secondary filters:
- Market Size: How pervasive is the need among your target segment? The more widespread the unmet need, the larger your potential market.
- Expertise: You have direct experience and/or subject matter expertise that helps you understand the nuances of this need.
- Evidence quality. In your decision-making, weigh items with more evidence quality highly, rather than those that simply come from gut instinct.
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2) Customer Unmet Needs: Workflow
Pinpoint your target’s top current activities to achieve its Customer Unmet Needs
In short, a use case or workflow is the specific set of activities or actions needed to achieve your dream outcome. For example, an annual appeal could be a workflow to achieve the outcomes of donor retention or fundraising a specific amount. Later in the series, we’ll take a deeper dive into the critical concept of workflows.
Without mentioning a clear use case, your efforts get fuzzy. For instance, merely stating that you're "increasing donations" is insufficient, as it's just an outcome.
Instead, focus on specific actions that drive this outcome, such as "recurring giving programs" or "personalizing donor campaigns."
This approach enables you to create messaging that resonates more with your audience, ensuring your product aligns with their current activities and needs.
To identify the top use cases, return to your target market and identify:
- What set of specific actions does your ideal client profile take today to achieve the dream outcome you’ve already identified previously?
- How do they describe or name this set of actions to their peers or teammates?
- What comes before and after this set of actions?
3) Customer Unmet Needs Formula: Limitations
What is ultimately not working about what your segment is doing today?
Understanding the gap between a customer's dream outcome and existing solutions helps clarify the value of your solution.
This is the final item in the customer unmet needs formula below.
Part 1: Customer
Part 2: Unmet Needs
Get [Dream outcome] [without top 1-2 biggest limitations of / problems with today’s solutions or workarounds]
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There are four key steps to finding which limitation to make the centerpiece of your formula
A) Limitations: Challenge Your Bias
To counter this, study the real-world alternatives—those imperfect yet "good enough" solutions people already use to meet their needs.
Innovators often stumble because they fail to understand the real-world alternatives their audience already uses (or would realistically consider) to solve unmet needs. By ignoring these existing solutions, they risk comparing themselves against "illusory alternatives" that fail to address the limitations of current options their target considers. This misstep blinds them to authentic market gaps and opportunities.
⚠️ If you find yourself questioning whether your audience actively seeks solutions or passively tolerates existing limitations, consider this a crucial red flag. ⚠️
You may be addressing a problem that feels secondary or irrelevant to those you aim to serve. Early-stage innovations cannot afford to both solve a problem and persuade users to care about it. Actions often speak louder than words; just because your target claims an issue matters does not mean it truly does. Instead, heed these signals early and recalibrate your focus, ensuring that your efforts align with what genuinely drives your audience's decisions.
B) Limitations: Brainstorm Your Segment’s Top Alternatives
Identify the main alternatives your target uses to achieve the dream outcome you prioritized.
Investigate direct competitors, like using MailChimp for email campaigns, and workarounds like DIY solutions using Google Sheets to manually compile data.
Ask your target customers: Who or what do they see as your natural competitors? How would they describe what you do to a colleague? Use these answers in Google searches or ask an AI chatbot to find similar solutions.
If you have a long list of alternatives, group them into categories (e.g., "Enterprise-level CRM solutions" instead of specific CRMs) or prioritize them (I can guide you through this if needed, but for now, let's keep it simple).
C) Limitations: Brainstorm Where Those Alternatives Fall Short
Why are these alternatives not working, and why do these gaps matter to your segment?
The intensity of these pain points often directly relates to how much your solution could impact customer satisfaction and loyalty.
If customers express significant frustrations, there's a strong opportunity for you to help.
For top existing solutions, also identify usage costs, including pricing and time. These are crucial for buyers assessing a solution's value.
This information can help you price your alternative and highlight its ease of adoption and benefits, ensuring it offers enough value compared to existing solutions to drive change.
D) Limitations: Prioritize
After brainstorming top solutions, prioritize the challenges you want to tackle.
I suggest similar criteria as you did for prioritizing the outcome:
- (Unmet) Frequent desire for help with this problem.
- (Urgent) Active problem solving to address the issue.
- (Core) Not solving this problem significantly affects your segment's dream outcome success metric.
Then, apply these secondary filters to refine your selection:
- Feasibility: Can you solve the problem cost-effectively given your team’s strengths, capabilities, and current tech or processes?
- Market Size: How common is this problem among your target market?
- Long-term impact: Assess if delaying action makes the problem harder or costlier to solve later. For instance, "technical debt" can accumulate, turning small issues into major technical hurdles that require expensive fixes.
These filters help ensure your chosen problems are both important and practical to address given your resources and long-term strategy.
Customer Unmet Needs: Example
Let's return to our running example where fundraisers said their top unmet need was donor retention and engagement.
For solutions, you found typical players like CRM systems, donor management systems, and fundraising platforms.
You decide to focus on community health nonprofits that use donor management systems, not CRMs. It's a smaller market but aligns with your unique advantages, and your team acknowledges they can't match all typical CRM functionality.
Analyzing your top customers' feedback, you discover two major pain points related to their main use case (personalizing campaigns):
Mail merges are a nightmare. Teams waste hours struggling with templates and manually adjusting data for personalized outreach.
Campaign reporting is tedious. Generating numerous reports to motivate the team for the next push consumes valuable time, making it harder to move quickly and optimize strategies.
These issues stood out because they were linked to critical consequences — significantly reduced revenue potentially leading to staff layoffs, plus 10+ hours of weekly staff time worth thousands a month — and your targets were actively trying to solve them with ineffective workarounds.
Customer Unmet Needs: Example Statement
Here’s the formula again
Part 1: Customer
Part 2: Unmet Needs
Get [Dream outcome] [without top 1-2 biggest limitations of / problems with today’s solutions or workarounds]
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Applying this to our running community health example, here’s one example you might brainstorm:
Target Sentence Formula
DonorFamily: We are a Donor Engagement Platform helping Community health fundraisers personalize donor campaigns.
Customer Unmet Needs Formula
Minimize churn and grow thriving donor communities without tedious data segmentation or inauthentic messaging at scale.
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Next: Customer Persona Worksheet
We’ve introduced the concept of a customer unmet need and the top gap that frustrates them from reaching it. Now, let’s dive into how you will bridge that gap by identifying your top differentiator.
👉 What’s your biggest challenge in this process? Share your feedback here or toggle by clicking.
See the next article in the series below
This is a series about building and refining your messaging and positioning
#1 - Series Intro: (i) Messaging & Positioning Template & (ii) 5 Expert Tips
#2 - Messaging & Positioning Template: (i) Customer Unmet Needs & (ii) Persona Worksheet
#3 - Messaging & Positioning Template: (i) Ideal Client & (ii) Ideal Client Worksheet
#4 - Messaging & Positioning Template: (i) Differentiators & (ii) Value Proposition Worksheet
#5 - Messaging & Positioning Template: Market Category
#6 - Overcoming Objections to Positioning: (i) Proof; (ii) Workflow Redesign; (iii) Offers
#7 - Messaging & Positioning Process: Testing
#8 - Messaging & Positioning Process: Learning from Data
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