Creating demand … by tapping non-customers.

Ken’s Take: “Blue Ocean” Strategists say to stop competing head-on in established markets and refocus on uncontested part of markets — the wide open, blue ocean.  A critical componect of a blue ocean strategy is to “unlock” non-customers …

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From the folks at the Blue Ocean Institute …

Traditional strategic thinking looks to capture a greater share of existing demand. But companies can reach beyond existing demand to unlock demand from non-customers, too.

The key is to understand the three tiers of non-customers who buy opportunistically  … or  refuse to buy  …or are unaware of the product offering.

First-tier non-customers are closest to the existing market. They are the buyers who minimally purchase an industry’s offering out of necessity but are mentally
non-customers. They are waiting to jump ship and leave as soon as an alternative is spotted. These are potentially “soon-to-be” non-customers.  But, if they are offered a step-up in value, they can be retained … and may even increase their purchases.

Second-tier non-customers are people who consciously refuse an company’s offerings. These are buyers who have recognized an company’s offerings as an
option to fulfill their needs but have opted against them. These are “refusing” non-customers.

Third-tier non-customers are furthest from the existing market. They are non-customers who have never thought of a company’s offerings as an option. These are “unexplored” non-customers.

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The key question to ask: “What are the factors keep non-customers out of the market … and what can be done to pull them into the market?”

Start by by focusing on the key commonalities – not differences – across these non-customers and existing customers to gain insight into how to create demand among these non-customers.

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