Too often our understanding of our customers is insufficient. We think we know what they want, so when we design products and services to meet their needs and solve their problems, we expect to build a customer base on providing that value.

However, when our plans meet the reality of the marketplace, it can be a sad day (or as many days that our cash will sustain the startup).

There must be a better way to be more deliberate in accessing and understanding our customers, right? If you’re like most small businesses or organizations, you don’t have a large research and design budget, so you need simple, accessible tools to help design a solution, product, or service that is truly going to be valuable and successful.

In previous articles, we’ve discussed Customer Discovery processes, including Human Centered Design and Lean Startup up tools such as the Value Proposition Canvas and Business Model Canvas. These are all great tools, and I want to introduce you to a new one that I’ve been learning about called Situational Diagrams.

The Heart of Innovation: A Field Guide for Navigating Authentic Demand makes the case that innovators need to move beyond customer demographics and psychographics, and overcome design bias that prevents them from fully understanding what their target customer experiences in a real situation that involves the use of a product, service, or resource. Typically, a problem or situation that the innovating team is re-designing is a product or service to sell them.

Situation Diagrams

This tool helps you clarify what you think you know about the customer in a given situation using four categories or boxes: Actions, Equipment/Resources, Relationships, and Channels. Let’s review these four areas and use an example customer situation from Wayne’s Pool and Spa business:

Actions: A person of interest’s actions or behaviors of interest. These should be at the personal interface engagement level and not removed from the personal experience, actions and behaviors. Example: Pool owners that need to open their pool, or clean a dirty pool.

Equipment/Resources: The tools, methods, and equipment that the person of interest needs. In our example, the pool owner needs a device to remove the leaves, dirt, and other organic materials that have fallen into the pool during extended periods of non-use.

Relationships: Activities by others helping the person of interest with their situation. These are the people that are related to the situation and may be another form of resource to help. Our pool cleaning example may include: pool supplies vendor, lawn/garden service provider, friend or family member who knows how to care for a pool.

Channels: The pathways by which equipment and/or relationship resources reach and impact the situation. In our dirty pool example, this could include a service contract with scheduled maintenance as well as an online database of pool cleaning resources organized by location.

Here’s an example Situation Analysis:

Each year, I have to open, clean, and ensure that my pool is functioning properly if I want to enjoy it throughout the summer months. However, every spring I become very discouraged because I seem to have lost some of the water under the tarp and find leaves and dirt in the water. Opening the pool and troubleshooting these and any other unforeseen problems is critical – and I often don’t know who can really help me.

So, what actions may I take in early spring? I typically start by going to YouTube to watch videos about proper ways to open my pool and use my operating system. I also look for DIY troubleshooting tips for leaks. It seems that the easiest way to identify a leak is to first inspect the pool liner to look for small cracks or holes that might allow for water to leak. Then, I get the pool operational to test for leaks in the inflow and outflow pipes, drains, and skimmer boxes. This requires making a commitment to cleaning, refilling, and getting all systems up and running first.

Equipment/Resources: Pool cleaning supplies are the first place to start. Having the right net to remove leaves and debris from the pool, and having the right chemicals and knowing how to test for pool water quality. However, it is the operations equipment and troubleshooting tools to solve for leaks that seem to be the area where I have a strong demand and need.

Relationships: Given that I live in a rural area, I have a hard time finding pool-related service providers. One time I envisioned that if I could hire a plumber with one of the auger/snake machines with a camera at the end, it would help me identify where there may be a leak in the pool lines and drains. But the person I tried to hire would not use their equipment on pools. The pool supply companies either don’t offer services, don’t service my areas, or only want to sell me the most obvious piece of equipment (a new pool liner) rather than troubleshooting and isolating the problem.

Channels: I’ve tried using word-of-mouth to get referrals for pool service providers from my neighbors and friends with pools. It has been difficult getting them on the phone to come look at my pool. I’ve also tried searching online for pool companies, but have not found anyone who will service my area.

So, you can see that in my situation, there are opportunities to address my situation and needs. What do you think a pool supply and service provider company might be able to learn from my situation? What things might they be able to do to reach people like me?

Now that you know about situational analysis. Can you think of situations that your customers experience and where there may be gaps or authentic demand for a solution?

Reply back with your comments and I will send you a resource to help you dive deeper into this topic and learn more about your customers.

Interested in diving even deeper? Book a call with me to review your results and create an action plan.

*Photo by Suha on Unsplash

About the Author Paul Wright

Paul Wright is the founder of WVS Courses and Coaching, and is passionate about helping entrepreneurs launch and grow new enterprises. He especially enjoys working with social innovators who create a greater good in the world with their businesses.

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