| Issue 36 |

Marketing to “Non-Customers”

You don’t always have to go head to head with competitors and try to “steal” market segments from them. As we noted in this section in the past it’s sometimes better to avoid head on competition and work towards expanding the entire market. In order to do this you should try and increase consumption of existing customers. Alternatively, you can try and persuade the “non-customers”, those that haven’t yet bought products in this market, to start buying.

Turning “non-customers” into new customers may often turn out to be a particularly lucrative step. This will be our focus this time. This process, of focusing on the “non-customers”, is described at length in the book Blue Ocean Strategy. How is it done? How do you turn consumer dissenters into new and potentially even enthusiastic and loyal customers.

Firstly, you have to understand why they haven’t been buying up until now:

• Who are the non-customers? Do they have common characteristics?


• What is it about the current products that they don’t like? What prevents them from buying?
• What do they buy instead? What substitute products do they use?

Secondly, you should develop new products for them that are tailored to their unique requirements:

• What needs to be done so that they start buying?


• How does the product, accompanying service, or price need to be altered?


• How do the points of distribution and advertising need to be adjusted to suit them?

Here are some examples of unique solutions for non-customers in the private car market. We will focus on customers that have never bought a car before:

• Too young to get a driver’s license: Perhaps a specific model should be marketed to a 15 year old audience, which no car manufacturer bothers to target? There is a chance that when they do obtain their driver’s licenses, they’ll remember which manufacturer treated them seriously, like adults. This can lead to a first car preference for this specific model. This car should ideally be inexpensive, economical on gas, have a youthful design, compact size, good sound system, and a high safety profile (to satisfy the parents). A fully loaded Mini Minor manufactured in China?


• Drivers who prefer motor scooters: Maybe offer a trade-in for a motor scooter when you buy a car? Maybe give whoever buys a car a subsidized annual subscription for scooter rental inside the city – where there is free and abundant parking? Or provide car buyers with 50 “scooter taxi” rides for free? Or maybe even develop and offer a car with a special trunk that can easily store a scooter?


• Public transport passengers: This group generally lacks the resources required to buy and maintain a car. They perceive cars as being too expensive. Maybe offer them a basic and durable car on a time-sharing basis? Or develop a focused campaign for them on adverts inside busses and trains? Maybe offer them a long-term loan to purchase a car (and benefit from profit on the interest)? Maybe offer them a subsidy on gas and insurance for the entire life of the car (in collaboration with a national gas station chain and an insurance company happy to secure new and loyal customers for many years to come)?


• Taxi passengers: They hate having to look for parking, and sometimes prefer getting tax returns for their taxi rides. These are usually affluent individuals that if they would buy a car, it would be an expensive one. Perhaps offer these buyers a discount or full one-year subsidy on parking in a lot near their place of employment, as a perk? This can cost the car manufacturer a few thousand shekels, but he is accustomed to giving these kinds of discounts in any case. The buyers will appreciate this as a substantial bonus.
  
• Adults that do not have a driver’s license: They may have tried passing a test a few times and failed repeatedly, until they just gave up. Perhaps offer them driving instructors that will help them pass the test, for free? Many would be willing to commit to buying a car if they indeed passed the requisite test. It is possible to recruit especially patient instructors and hire them as paid employees, develop a unique course for the driving-challenged, and keep a small fleet of “instructional” cars. These non-customers will perceive this as extremely valuable, and it will sell a lot of new cars…

In numerous markets, if not in all, there are more non-customers than customers, and these definitely exceed the number of customers that can be “stolen” from the competition. There are more adults without cars than those with cars. There are a lot of people that don’t take vitamins. That don’t eat in restaurants. That don’t subscribe to movie channels. That don’t study at university. That don’t consume yoghurt. That don’t wear suits. That don’t visit museums. That don’t take digital pictures. That don’t subscribe to newspapers. That never seek consulting services. Maybe the time has come to focus on these people!
 

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• For the article on Blue Oceans in Israel: click here
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