Marketing to Non-Customers

We all know what “Segmentation” is, right? It is the division of the market into different homogenous groups of consumers or customers. What is the key word? You are correct – customers. Traditional marketing teaches us that we should seek out and go after the customer segments that may have a need for our products. Whether it is promoting to an existing customer base or targeting a future customer segment (Ex. when launching new products), marketers have always taken this traditional approach.

But what about segments that cannot afford your brand of product or services? They may not be able to buy it but that does not mean that they do not like it or desire it. I would love to own and drive a Porsche but, guess what, I can’t afford it. At least, not just yet. But, someday I will. J So does my lack of ability to afford a Porsche de-incentivize or stop me from talking about it? Not at all. I like talking cars, especially sporty, luxurious cars, with my friends. And there are all kinds of opportunities available to me, where I, consciously or sub-consciously, express my interests - work, school, socials, professional events, kids birthdays, gym, etc. In essence, I am a customer that may probably never buy your product but that still does not stop me from fantasizing or talking about your product. Guess what, I am doing you a big favor here. Although I am not a customer or a consumer of your product, I am campaigning for your product and helping improve its awareness. I bet you love that!

So Mr. CMO, are you starting to see some opportunities over here? It might make good business sense to set aside some marketing funds for promoting to non-customers after all. By no means am I suggesting that this is good for everybody. Small to mid-size companies are usually cash-strapped and have limited consumer research or advertising dollars, and they would rather focus on the customer segments. But it would be prudent for large firms, which are typically looking out into a 5-10-20 year horizon, to invest in promotions for non-customer segments. In the short-run, marketing to non-customers will help you improve your product brand awareness and recall. In the long run, this strategy will pay off in terms of increased market share when the non-customers convert to customers.

Here is a high level approach, in case you decide to pursue your non-customers -

1. Define your non-customers
2. Identify the non-customers
3. Build a Business case (complete with objectives to be met and outcomes desired)
4. Define the promotion strategy
5. Define how you will operationalize the strategy
6. Define how to track ROI
7. Operationalize the strategy
8. Track performance and ROI

One thing is starting to become very clear in the business world – In order to create sustainable competitive advantage, you must change the game, you must re-define “normal” behavior, and you must challenge conventional wisdom. Are you still thinking like others or are you going to be different?

Comments

[Srinivas]

Great post. How does this work in a B2B setting? Can you apply the same strategy for B2B as you do for B2C?

[Uday Kumar]

Great question Srini. Some of these concepts can be applied in B2B settings but I would have to say it becomes a lot more tougher. In a B2B setting, I would say that pretty much every business is your customer. For example, if you are in the business of selling accounting products, every company would need that. Larger companies may go for an ERP package like SAP but smaller firms may use cheaper/compact products. On the other hand, if you are in the business of selling hospital beds, only hospitals would qualify as your customers because that product only serves a specific need. In this example, all other businesses become non-customers. But would you see any value with communicating with these non-customers? It all depends on the kind of business you are in and what you are making/selling. In B2C settings, majority of the customers have a uniform set of basic needs/desires and that helps.