Toward a solution

To help clarify the dynamics, consider the following Customer Wants and Needs grid.

Cell one represents the articulated wants and needs of current customers. This means a significant number of customers are saying they want a particular feature, function or benefit. But even when wants and needs have been articulated (and heard), the company may not have found a profitable way to develop and produce the solutions.

Cell two represents the articulated wants and needs of potential customers who are not currently served. This includes former customers and those who have never been customers. Often little is known about people represented by this cell.

Cell three represents wants and needs of current customers that the company has not heard articulated. This does not mean no one has articulated the wants and needs; indeed, it may be that a few customers have not only felt the need, but have created their own solution. (More on this below) What is important is that the company does not know these wants and needs.

Cell four represents wants and needs of non-customers that the company has not heard articulated. As with cell 3, these wants and needs may have not only been understood, but solved – by a customer or customers somewhere. This is the cell that is least understood by nearly every company.

Even a company with 30% market share (a giant in its industry) does not serve 70% of the market. Thus cells three and four represent the greatest opportunity for maximum innovation opportunity, since to fulfill as yet unrecognized wants and needs is the essence of innovation.

But how can a company learn about wants and needs that those in cells 3 and 4 haven’t even recognized themselves? And how can that company then identify solutions that customers (and current non-customers) will buy?

The answer to those questions is the focus of the rest of this paper.