From NonCustomer to NewCustomer
NonCustomers are people who haven't bought from your business yet, but they can be a goldmine of information for future growth. By understanding who they are and why they haven't bought from you, you can create a more effective marketing strategy to target them and convert NonCustomers into NewCustomers.
First, It’s important to understand that there are three types of NonCustomers:
The UnderValued
The UnSold
The UnKnown
By exploring and understanding these NonCustomers, you can get a better idea of what they want and need. Then, use that information to improve your products or services and effectively target your marketing efforts. Now, let’s dig into the three types of NonCustomers in more detail and go over how to explore them.
NonCustomer 1: The UnderValued
UnderValued NonCustomers are people who don't regularly buy from your industry, but they could be an excellent opportunity for growth. Even though they may only purchase out of necessity, by understanding why they haven't fully engaged with your industry yet, you can create a more effective marketing strategy to attract them as customers.
It's important to remember that everyone is an UnderValued NonCustomer for something. These NonCustomers may not be loyal to a specific brand in your industry, but that doesn't mean they're not open to new opportunities. By exploring their needs and wants, you can create a better product or service that appeals to them and make them want to stick around.
A personal example
This is not a promotion to use one service over another. This example is to illustrate my experience as an UnderValued NonCustomer. Full transparency, we are still evaluating final solutions.
A personal example that I can provide from my own experience being an UnderValued NonCustomer is with Calendly. I think Calendly is a fine product, but what’s important to me are the following features in the paid plan:
Connecting to all my calendars so my meeting links can be aware of everything on any calendar I own.
Connect my team with the service, so I can provide them with the same features and see their availability.
Having the ability to send autoresponders and follow-ups for calls that are scheduled.
Why did I cancel my subscription?
I discovered Motion. At a price difference of $4 a month per user, Motion delivers all three of those top features from Calendly, plus a few others:
I can have my autoresponder send those follow-ups for calls from any of the accounts I have connected.
Motion adds the ability to time-block directly on your calendar and automatically moves things around when meetings are scheduled.
Motion adds the ability to assign tasks to my team directly from the same interface, giving me a management overview of my organization.
This was all it took to make me cancel my Calendly accounts and move to Motion. My justification was that Motion gives me all the main features I use from Calendly, makes my life easier on one of those features, and has several potentially beneficial other features.
As I said, we are still evaluating the product, but I plan on writing up how effective the tool is once we have given it a few months and we see how the long-term roadmap of the product is developing.
Consider a product or service that you're not particularly attached to. While it may work for you, you would be open to using something else if it was a little bit better. Suppose you can provide these UnderValued noncustomers with a dramatic leap in value. In that case, you will be able to convert these NonCustomers into NewCustomers and increase their loyalty to your brand, frequency of purchases, and the amount they are willing to spend. This unlocks enormous latent demand in prospective customers for you to look for.
How do you convert these UnderValued NonCustomers into loyal and repeat NewCustomers?
Speak to them.
Audit your existing customer list
Identify the ones you have the lowest engagement with.
Interview them:
What NEED do they use your offering to solve?
What other tools do they use in the process to solve that NEED?
How would they solve their NEED if there wasn’t an offering in the marketplace?
What do they like least about your offering?
What other options have they explored to replace your offering?
Identify the commonalities across responses.
Those commonalities will tell you what you need to do.
NonCustomer 2: The UnSold
Some people may not be interested in using the products or services in your industry. It's important to remember that this doesn't reflect on you personally, and it's not just your offerings they're not interested in, but those of your competitors as well. They simply don't see the value in paying for what is being offered.
A personal example
My personal example of being an UnSold NonCustomer is paid subscription recipe apps.
I haven't found value in using paid subscription recipe apps. As someone who enjoys cooking, I find plenty of free options available, and I haven't come across a paid service that makes finding recipes any more compelling. I haven't found the value-to-cost ratio to be worth it for me, so I've decided that I don't use paid recipe apps.
Think about any product or service that you don’t see value in. Does it cost too much? If it did more, would you reconsider? Appreciate that these noncustomers can become your most loyal customers if you give them the value they deserve.
How do you convert these UnSold NonCustomers who refuse (or can not afford) to use any of the current market offerings?
Examine the prospects who made it into your funnel but did not purchase.
Look at the organizations searching for your offerings and identify what they are using instead. (side note: Clearbit is an excellent tool for learning some of these data points - and they have a limited free version that can get you started)
Speak to anyone you can that you think could benefit from your offering.
Ask them the following:
Do they feel that the problem your offering is solving is actually a problem?
What is the larger NEED that your offering would be a part of?
What are the key reasons for not using any of your competitors?
Identify commonalities across responses.
Those commonalities are potential pivots you should look at.
NonCustomer 3: The UnKnown
The third potential customer type is those unaware of your industry's offerings. They may not have considered it as an option to solve their needs. It can be a little challenging to find examples of these prospects. If you can quickly identify them, they are likely not "UnKnown." However, sometimes I come across companies that offer a service, but it's not marketed towards me. I can't think of a specific example at the moment, but I'll update this if I come across one I can share with you.
This group of UnKnown NonCustomers has a lot of potential demand, but it can be difficult to reach and attract them. A creative approach I’ve seen used to accomplish this is to identify a NEED that everyone is already solving by leveraging sub-offerings by other providers. Then create an offering for those providers that either increases their sub-offerings value as a purveyor or leapfrogs the need to utilize the provider and directly target their customers.
In the book "Blue Ocean Strategy," they give an example of how the invention of whitening toothpaste created a new market. Before, people would only go to the dentist to get their teeth whitened, but now many safe and affordable options are available to whiten teeth at home. This is an excellent example of how companies can tap into the demand of people who may not know that you can deliver directly to them.
How do you convert UnKnown NonCustomers to NewCustomers?
This is a much longer process than there is room for in this article, but my recommendation would be to pick up (or download) “Blue Ocean Strategy”, by Chan Kim and Renée Mauborgne. In it, they go into several frameworks and tools that can be utilized to identify, target, and strategically align your offerings to focus on these hidden oceans of prospective buyers.
In conclusion, there are only three different types of NonCustomers, and you can explore them in systematic ways. Some may have tried your offerings and found them wanting, others may not have considered your industry's offerings as a solution to their needs, and some may not be aware that your offerings exist. Understanding these different types of NonCustomers and their needs is essential for any business looking to expand its customer base. To attract them, it's important to understand their needs and create an offering that addresses them specifically. So, don't overlook noncustomers. They could be the key to your next successful business pivot.
Thank you for reading my article!
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