Looking for Growth? Look at Non-customers
The other day I wrote about competition. Today I have non-customers on my mind.
If your company is looking for growth (and what company isn’t?), it can be tempting to try to poach customers from others in the same industry.
But this comes down to slicing a single pie into increasingly thin slices among the possible suppliers. What if there were more pie? A LOT more pie?
Chances are, not everyone who COULD be using your product, is. So rather than fighting over a small number of consumers in a bloody red ocean, what if you had a way to tap into a whole new market of customers?
…did I mention I’m reading Blue Ocean Shift?
The book includes an activity to call out the three tiers of non-customers you could focus your efforts on. The tiers are called out because there are different barriers you’ll need to overcome to convert customers from each tier.
Tier 1: These non-customers sit on the edge of the industry. They use industry offerings but only reluctantly or infrequently.
Tier 2: Have considered your offering and dismissed it.
Tier 3: Would benefit from your offering but haven’t even considered it.
Of course, simply identifying these tiers of potential customers is only a start. You need to follow it up with an explicit strategy.
The team over at Strategyn identified how to serve an array of types of customers in their Growth Strategy Matrix. In the following 2x2 matrix, a company can select a strategy based on the types of customers they wish to serve.
I’ve said it before, and I’ll say it again. The only way to know if you’re innovating — creating or capturing new value — is by engaging with real customers. Not guessing or assuming what works or doesn’t work with current market solutions.
So although I love the idea of matrices and frameworks, these are all just academic exercises if you’re going through them without outside consultation.
Innovation means stepping beyond what’s believed to be true. The reason non-customers are such an attractive path to growth is because it REQUIRES un-conventional thinking.
“What got you here won’t get you there”
— Marshall Goldsmith
Tier 1 and tier 2 non-customers perceive something missing in the existing offering.
Tier 3 non-customers perceive the offering or your brand as unattractive, or not a good fit for them.
Doing more of what you’re already doing won’t convert any of the three types of non-customers. You have to do something different if you want to elicit this type of change in behavior.
One huge caveat in all of this: the last thing this is supposed to elicit is a blanket statement like “our target market is everyone”. Not every non-customers is a good fit. You still need to ensure there’s a match between the customer problem, your solution, and the value exchange.
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Andrea Hill is the principal consultant at Frameplay. Frameplay is an innovation consultancy that helps companies become more customer-focused and thrive in a rapidly changing world. Learn more at frameplay.co