The Journey Beyond Traditional Customers
Going against traditional business strategies
In the intricate dance of business strategy, the spotlight often fixates too heavily on the stage of constant competition.
While competition is undoubtedly a vital element, it’s time to look broaden our perspective and venture into uncharted waters, exploring a strategic approach that goes beyond the conventional boundaries.
Let’s delve into this fresh perspective that holds the key to unveiling new opportunities and untapped potential.
Unleashing New Demand
To embark on this transformative journey, we must challenge two traditional practices.
Firstly, the excessive focus on existing customers,
and secondly, the tendency to delve into finer segmentation to accommodate buyer differences.
The inherent risk in this approach is that companies may confine themselves to a very small marketspace. The antidote lies in a complete reversal — concentrating not only on existing customers but also on non-customers and focusing on buyer commonalities not differences.
The focus should shift from buyer differences to commonalities, unlocking demand that was previously untapped.
- Example: Callaway Golf
In the fiercely competitive golf industry, where everyone vied for existing demand, Callaway Golf took a revolutionary approach. They ventured beyond the boundaries by questioning why some sports enthusiasts and country club-goers refrained from choosing golf as their sport.
The revelation was that the small golf club head and the difficulty in hitting the ball led to diminished fun and prolonged learning curves.
Callaway Golf responded by introducing Big Bertha, a golf club with a larger head. This not only converted non-customers but also delighted existing customers.
By focusing on non-customers and emphasizing buyer commonalities, they not only unleashed new demand but also leaped in value for both existing and non-customers.
Non-Customers
Understanding the dynamics of non-customers is pivotal. There are three tiers of non-customers, each at a different distance from your market. Notably, non-customers possess invaluable insights on unlocking new marketspace, often more than existing customers.
- First tier non-customers
These are the soon-to-be non-customers situated at the edge of your market. As their numbers increase, market stagnancy becomes a pressing issue, leading to a growth problem. However, offering them a leap in value multiplies their purchases, revitalizing the market.
- Example: Pret A Manager
In the rich tapestry of financial success, Pret A Manager emerges as a British fast-food maestro, Picture this: the year is 1886, and the realm of dining for professionals is dominated by the formality of sit-down restaurants.
However, a predicament lurks — a surge in the cost of dining out daily and mounting concerns about the need for healthier eating and professionals did not have time to eat in sit-down restaurant every day.
Now lets enter Pret and see what it did with this insight.
Entering the Pret A Manager: With walls that exude cleanliness and refrigerators brimming with 30 varieties of sandwiches, baguettes, or wraps — each freshly crafted that morning — the stage was set for a revolution. But the brilliance didn’t stop there.
At the close of each day, any leftover food found its way into the hands of the homeless (nothing left for the next day).
And In addition to that Customers spend a mere 90 seconds on average in the restaurant, a financial feat accomplished through a supermarket-style serving model — browse, select, and go.
Fast forward nearly 40 years, and Pret A Manager continues to bask in the market it meticulously carved. In 2023, their half-year sales surpass an impressive $500 million
2. Second Tier Non-Customers These are Refusing non-customers consciously choose to ignore your product. These individuals find the offerings either unacceptable or beyond their means. Their needs are either replaced with another alternative or ignored. Understanding their needs and reasons for refusal is good for market expansion.
- Example: JCDecaux
In the ever evolving world, JCDecaux emerges as the virtuoso orchestrator of a new era in outdoor advertising. Transport yourself to a time before 1964, where the outdoor ads industry, dominated by billboards and transport ads, faced a conundrum.
Billboards, stationed in the outskirts where traffic rushed by, struggled to capture attention. Similarly, transport ads, adorning taxis and buses, suffered from the same fate — mere glimpses as they whizzed by, leading to a low rate of repeat and especially bad conditions for lesser-known companies.
The verdict: outdoor ads were deemed unacceptable, beyond means, and largely ignored.
In a financial revelation, JCDecaux discerned the key commonality plaguing the industry — the absence of stationary downtown locations. Their knowledge led them to the realization that municipalities offered downtown spots like bus stops, where people sat and could be influenced over time.
The breakthrough came in the form of a strategic maneuver.
JCDecaux embarked on a journey to provide furniture (bus stop furniture) to municipalities, offering maintenance and upfront costs free of charge. Their acumen dictated that integrating ads on this furniture could yield more profit than costs — a groundbreaking strategy.
The Enduring Legacy: Fast forward around 50 years, and JCDecaux stands tall as the unrivaled global leader in the street furniture-based ad market. With a staggering 5,000,000 street furniture ad panels spanning 1,800 cities in 48 countries.
3. Third Tier Non-Customers
Often overlooked, these are totally unexplored customers (other industry players never thought of targeting) with needs considered to belong to other markets. Targeting these customers can lead to market explosions and unprecedented success.
- Example: The Joint Strike Fighters (JSF)
In the intricate landscape of U.S. military finances, a looming challenge cast a shadow — costs. Military leaders faced a daunting prospect: without a shift in aircraft production, defending national interests could become compromised.
Traditionally, the Navy, Marines, and Air Force held divergent views on the ideal aircraft, creating financial hurdles.
The JSF project — a game-changer. Instead of accepting industry norms, they dived into the commonalities among the Navy, Marines, and Air Force. Identifying shared high cost drivers (highest) — avionics, engine, and major airframes — unveiled the pathway to financial efficiency. Despite varied customization lists, most aircraft performed identical missions.
The JSF project found that despite the wide range of key competing factors, only those shaded in grey were decisive to each branch’s fighter aircraft decision.
Promising a groundbreaking one-third reduction in costs. The coup came to fruition in the fall of 2001, with the JSF securing a monumental $200 billion contract — the largest in military history, after Boeing.
Target the Biggest Fish
In this strategic expedition, there are no concrete rules on which customers to target. Instead, focus on the biggest fish that your company can effectively engage.
Simultaneously, recognize the key commonalities present in the three tiers of non-customers, providing a safety net for unforeseen opportunities.
Wrapping up
Breaking barriers in business means saying sayonara to the same old strategies, traditional customers and fine segmentation. That’s yesterday’s news. Think Callaway Golf swinging for the fences, Pret A Manager serving up freshness, and JCDecaux rewriting the outdoor ad playbook.
So ditch the old script, find the common ground, and snag those opportunities others are missing. It’s all about understanding non-customers, hitting the biggest fish, and cashing in on the untapped market.
